Off-track betting? Park County voters will be asked to consider pari-mutuel wagering this fall

Posted 7/16/20

Voters will decide this fall if they want to allow another type of gambling in Park County.

On Tuesday, county commissioners unanimously agreed to put a question on November’s general …

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Off-track betting? Park County voters will be asked to consider pari-mutuel wagering this fall

Posted

Voters will decide this fall if they want to allow another type of gambling in Park County.

On Tuesday, county commissioners unanimously agreed to put a question on November’s general election ballot asking whether voters want to “allow pari-mutuel wagering.”

It’s complicated, but if the measure passes, local residents could potentially see slot machine-like terminals installed at participating restaurants and bars, along with simulcasts of and betting on horse races.

Legalizing the betting would potentially provide a new source of tax revenue for the county and cities, which would get a 1% cut of the proceeds. Supporters say it would also provide a boost to local businesses and Wyoming’s horse racing industry. Cody businessman Josh Allison — whose newly formed 307 Horse Racing, LLC is seeking to start offering pari-mutuel wagering in the state — described it as a “win-win for everybody.”

It didn’t take much persuading to get commissioners to put the question to voters.

Commissioner Jake Fulkerson spoke favorably of finding more money for the county and its municipalities “at a time when the state and everybody is chasing nickels.”

“The other part I like is, it will drive business into the bars and restaurants that can really use it,” Fulkerson said of putting terminals in local establishments, adding, “I firmly support putting this in front of the voters of Park County.”

Commission Chairman Joe Tilden agreed.

“We need to look at every revenue possibility possible,” he said. “And we would be remiss if we didn’t put this on the ballot.”

However, Tilden offered that, “I think this is going to be a hard sell.”

Allison and 307 Horse Racing’s general manager, Randy Greer, made the case to commissioners that gambling is already a part of local life — from websites accessible on phones to state lottery tickets available at gas stations to Wyoming Game and Fish license raffles.

“I know gambling has always been a touchy subject in this county and in Wyoming in general — and to be honest I agree with some of it,” Allison said, but “we’re not trying to turn it into Las Vegas.”

  

A different kind of wager

Pari-mutuel betting is a form of gambling in which participants effectively bet against one another rather than the house. For example, odds on a horse race are determined by all of the bets that are placed (with the horse receiving the most bets offering the lowest payout and vice versa).

Wyoming has legalized horse racing — and pari-mutuel betting on them — for decades, but the sport effectively withered away to nothing by 2012. Allison said that “if you can break even, you’re doing pretty good from these horse races.”

But the industry came up with a solution in 2013, persuading the Legislature to legalize betting on simulcast events, like the Kentucky Derby, and also slot machine-like Historical Horse Racing Terminals (HHRT). The change to the law led to a massive surge in pari-mutuel betting and a resurgence in live horse racing.

Total wagers have skyrocketed in the years since — from $113.5 million in 2014 to nearly $800 million in 2019.

“The success of last year was astounding and surpassed all previous years,” Charles Moore, the Wyoming Gaming Commission’s executive director, wrote in a recent report recapping 2019.

Some $1.68 million was wagered on 30 days of live horse racing in Wyoming last year, with another $3.78 million wagered on simulcast events, such as the Wyoming races or the Kentucky Derby or Belmont Stakes.

But those totals paled in comparison to the amount of money that people poured into Historical Horse Race Terminals.

In 2019, people put nearly $793.4 million into 1,025 terminals in Wyoming, according to data from the gaming commission. Of that, roughly 92.3% — $732.5 million — was paid back out as winnings.

A total of $7.93 million — 1% of all the wagers, or the handle — went to 10 cities and 10 counties, with another $1 million sent to the state’s “Rainy Day” fund.

Allison pointed out that the City of Sheridan and Sheridan County each received $341,178.45 in revenue from the terminals in their areas last year.

“We feel like those would be very, very conservative numbers for [Park County],” he said, noting the tourism and the lack of any pari-mutuel betting elsewhere in the Big Horn Basin. In consulting with Tom Aronson, an industry expert, “he feels kind of like Park County can knock it out of the park,” Allison said.

Some of Wyoming’s off-track betting sites are standalone facilities — which look something like a sports bar with gambling — and Allison considered that concept for 307 Horse Racing. “But after further looking at it, it’s a good time to go in, talk to a lot of these restaurants and bars in our counties and, if the size fits our model, work with them and get it in there,” he said.

If approved by regulators, 307 Horse Racing would be the state’s third pari-mutuel betting operator.

The two companies that currently operate the betting and races — Wyoming Downs, LLC and Wyoming Horse Racing, LLC — pocketed 1% of the total wagered amount last year, or $7.93 million between them.

Allison said he’d be required to hold at least 16 days of live horse races each year, with the terminals providing funding to help stage the events. Last year, around $3.2 million worth of proceeds from pari-mutuel betting were put into a fund to award Wyoming horse breeders.

Horse races are being held in Evanston and Rock Springs this year across 26 days. While the pandemic and economic downturn led to the cancellation of races in Gillette, “it’s getting bigger every year. It’s getting huge,” Greer said. With no horse races in Montana, South Dakota or Idaho, “they’re all looking for a place to come,” Greer said. “And it’s bringing better livestock to the state.”

Allison said his biggest motivation with the new venture is to support Wyoming horse racing, saying he wants to double or triple the 16-day minimum of racing days.

“That’s how we started this whole thing — we were buying racehorses and thought, ‘Man, it’d be cool to do this right,’” he told commissioners. Allison said he’d like to see Wyoming horses start being a factor in races around the country.

Greer said 307 Horse Racing plans to hold a race at the Camplex in Gillette next spring, and also hopes to race horses in Casper and eventually Cheyenne.

“Hopefully someday, we may run horses here [in Park County], if that’s feasible,” Allison said.

  

Not a slot machine

While they may be profitable, the Historic Horse Racing Terminals are not without controversy, with critics charging that they look a lot like slot machines (which remain illegal in Wyoming). However, Allison noted that they are different.

Every spin on one of the terminals is based on real races, so the results are not random, explains a page on Rosie’s Gaming Emporium, a Virginia business that offers historical horse racing machines. Before spinning, players can look over some information about the horses and pick winners or just spin, letting the computer pick the horses with the best odds. That’s followed by an animated re-enactment of horses running the race, Rosie’s page explains — though players can also check out a graphical representation of the race, which basically looks like a traditional slot machine.

When Wyoming lawmakers changed the state statutes in 2013 to allow devices based on historic race results, former state Rep. Mike Madden, R-Buffalo, said the terminals were “explained in terms similar to pari-mutuel live horse racing.”

“What materialized instead,” Madden wrote in a February column for WyoFile, “were instant gratification games that had — and still have — questionable relationships to actual past horse races.”

That technology also ran afoul of the Wyoming Attorney General’s Office in 2015. The gaming commission — then known as the pari-mutuel commission — ordered the machines unplugged until they were reprogrammed to remove random bonus rounds, according to past reporting by the Casper Star-Tribune.

The horse racing machines came back online after software tweaks, but some skepticism has remained.

“The reality is you’ve got slots in the state of Wyoming,” state Rep. Tyler Lindholm, R-Sundance, said during the Legislative Session in February, according to reporting by the Wyoming Tribune Eagle. “Whether you want to believe it or not ... reality is you can go into one of my favorite little bars in Casper, and you tell me if those are historic horse racing games. Because they’re not.”

The Legislature debated gaming over the winter because of a surge in a similar, but different type of machine, known as skill games. The machines’ manufacturers say they’re not gambling games, because players can see if they have a shot at winning money before they finalize a wager and must “nudge” a reel or “swap” an icon, which, the manufacturers say, requires skill.

However, then-Wyoming Attorney General Peter Michael disagreed in 2018, saying the skill games were basically slot machines. He noted the large majority of “spins” were predetermined money-losers in which “even the world’s greatest Wyoming Skill Game players’ ‘skill’ cannot save his wager.”

Despite the opinion, the machines are believed to have proliferated around the state, with no formal regulation.

Powell police, for example, learned of a skill game at a local bar in February 2019 when a patron complained that, although he’d won $97, the machine paid out $80. Officers didn’t take any action on the man’s lost winnings, but did have the device shut down.

Believing there were hundreds of unregulated machines around the state, Wyoming lawmakers passed a bill in March that legalizes skill games through at least June 2021. What will happen beyond that is anyone’s guess.

But Historic Horse Racing Terminals are in the clear — as long as voters in a county choose to allow pari-mutuel betting.

  

Down times

In his February op-ed for WyoFile, Madden wrote that “nearly every state that has expanded gambling did so in periods of fiscal shortfalls” — when governments were looking for money. The down times were an obvious factor at Tuesday’s commission meeting.

Allison, whose business ventures include multiple oil and gas service companies, noted that Wyoming currently had just one rig operating in the state last month — down from 32 rigs a year ago.

“I don’t know if that’s ever happened,” he said.

Similarly, commissioners took up the discussion on pari-mutuel betting immediately after laboring over whether to allow three vacant county positions to be refilled, given the county’s budget crunch.

“We are trying to help. You don’t have to put a dime into it,” Greer told commissioners. “... And we can solve every problem that come in here before us.”

Allison said 307 Horse Racing will likely employ a PR firm to help explain pari-mutuel betting to voters.

“This is a little bit different than what you’re used to,” Allison said. “The last thing I want is, you know, the smoky casino like you see in Billings, kind of run down that kind of gives that a bad name.”

Greer added that it will take support from local residents for the measure to pass.

“We can do all the PR we want, but unless you guys spread it around here, it’s never going to happen,” he said, to agreement from a couple commissioners.

Speaking as a citizen and as a longtime lover of horse racing, Park County Engineer Brian Edwards said he was 100% behind the idea. He said Park County “is a horse county” and that the pari-mutuel betting would boost tourism and tax revenue.

“Businesses are hurting,” he said. “It’s just another way to help bring up the local businesses.”

Election 2020

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