Oregon Racing Commission Faces Challenges According To Audits Division Report

Salem, Ore – The Oregon Audits Division has released an audit that highlights concerns regarding the state’s horse racing industry and the regulatory framework governing it. The audit points to ambiguous state gambling laws, which have led to differing interpretations and potential risks to economic interests and tribal sovereignty. As technology continues to evolve, the need for updated laws and rules to minimize conflicts between existing statutes and Oregon’s constitutional limitations becomes apparent.

The Oregon Racing Commission (ORC) holds extensive authority over all aspects of pari-mutuel wagering within the state, including live, simulcast, and historical horse races. During the 2019-21 biennium, the ORC generated around $7.8 million in revenues, with over $1.4 million contributing to the state’s General Fund.

Several key findings emerged from the audit:

  1. Delays in appointing and replacing ORC commissioners have been identified as an issue. This has potential repercussions for commission effectiveness and functioning.
  2. The need for improved oversight and transparency regarding funds allocated to support the horse racing industry was highlighted.
  3. The audit also revealed limited documentation of ORC’s reviews of historical horse racing machines, suggesting gaps in oversight procedures.

The contentious situation surrounding The Flying Lark’s request for 225 historic horse racing machines exposed conflicts between the state, tribal entities, and private industry. These conflicts underscore concerns about constitutional compatibility and regulatory authority over gambling activities.

The audit has resulted in four recommendations directed towards the Oregon Racing Commission, two for the Legislature, and one for the Governor’s Office.

For enhancing oversight and transparency within pari-mutuel wagering, the audit suggests the ORC should:

  • Implement requirements, whether in policy or rule, to assess new and modified game and wagering operations to ensure alignment with state statutes and the Oregon Constitution.
  • Develop comprehensive rules, policies, and procedures for allocating and reviewing the utilization of ADW (Advance Deposit Wagering) hub funds.
  • Ensure that commission meeting minutes provide clear and transparent documentation of approval details, including attachments relevant to commission decisions.
  • Maintain well-documented records of licensee reviews and safeguard them appropriately.

In addressing potential constitutional concerns related to casinos and clarifying state gambling and pari-mutuel wagering regulations, the Legislature is recommended to:

  • Collaborate with stakeholders and tribal representatives to provide a clearer definition of a casino within state statutes.
  • Establish specific statutory limitations on elements of user interfaces and player experiences for both online and physical gambling products, considering advancements in technology. These limitations should be applicable to ORC-licensed entities.

To ensure the continuity and effectiveness of the commission, the Governor’s Office is urged to prioritize the appointment of successors to replace commissioners with multiple expired terms and fill existing vacancies within commissions delegated broad authority.

For a comprehensive review, the complete audit can be accessed on the Secretary of State website.