Supporters of Idaho’s horse racing industry are putting a simple question to voters in November: Should Idaho allow the limited use of historic horse racing terminals to revive Idaho’s horse racing industry, its cultural heritage, and the jobs and associated economic activity live horse racing generates in communities across the state.
Big casino interests and their lobbyists got together with politicians in 2015 to shut down the horse racing industry by repealing the law permitting historical horse racing, which had been proven in Idaho as a sustainable economic support for live horse racing. After repeatedly being rebuffed the Idaho Legislature, Treasure Valley Racing set out to pursue a ballot initiative in early 2018. Teams fanned out across the state and began collecting signatures in mid-February to meet the statutory threshold of 56,125 valid signatures. At the April 30 deadline, the campaign turned in 114,815 signatures to county election officials. Those petitions have since been reviewed by county clerks then delivered to the Secretary of State for final validation and qualification for the November ballot. In early July, the Secretary of State determined enough valid signatures had been collected to put Proposition 1 on the General Election ballot.
- Idaho has a long and rich horse racing history, from race events at small tracks (as part of the county fair circuit) to daily summer-season racing at bigger venues like Les Bois Park.
- Racing, breeding and training are just some of the components of an industry Idahoans hold dear—an activity that embodies our cultural traditions and heritage and supports family farms and small businesses that benefit from horse racing.
- The horse racing industry is an economic engine that has been idle for more than two years. A study conducted by BSU showed that horse racing contributed approximately $50 million in annual payroll, sales, goods and services in 2015.
- Les Bois Park has not had a live horse race since 2015 and racing in other venues across the state has diminished.
- Historic Horse Racing terminals are essential to supporting and sustaining live horse racing in Idaho. When HHR machines were pulled from Les Bois Park in 2015, the track shut down and 285 jobs were lost. Overall, the industry shed more than 535 jobs statewide and many small businesses and family-owned horse farms were harmed or shuttered. In addition, breeders, trainers, jockeys and vendors have taken their business to other states that support a more vibrant racing industry.
- The use of HHR to support horse racing and jobs is not unique to Idaho. In fact, neighboring states like Oregon and Wyoming, as well as Kentucky, Virginia and Arkansas allow HHR. Altogether, 22 states allow some form of gaming or alternative revenue to supplement live horse racing.
Voters will be asked to legalize the same HHR terminals that were in operation before the Legislature voted to repeal the statute authorizing them in 2015. The initiative would also reaffirm that HHR terminals, in the same fashion as live horse racing, operate within a pari-mutuel betting system, which means you are betting against other bettors, as opposed to betting against “the house.” Unlike casino-style games, with HHR, at least 90% of the money wagered is returned to bettors.
The inner workings of these terminals make them quite distinct from slot machines. Slot machine winners are selected through a process of “random number generation.” In other words, winning is based on chance. The HHR terminals are tethered to a network – or tote – that functions as a pari-mutuel betting/winning system and operates in the same manner as live racing or simulcast. HHR winners are determined by the outcome of the race and the wager, fitting the definition of winning based of skill. By law, at least 90% of wagers are returned to bettors, which is far from the case with slot machines, where you bet against the house rather than other bettors.
There is another example to differentiate slot machines from HHR terminals: You can plug a slot machine into an outlet in your garage and it will work just as it does at any Las Vegas-style casino. But there is no way to plug an HHR terminal into a power outlet and expect it to perform at all. That’s because it must also be connected to the tote or network.
- Proposition 1 would reauthorize and allow pari-mutuel HHR wagering to resume, but in a limited fashion.
- The initiative would explicitly prohibit slot machines.
- The initiative would prohibit HHR terminals from being activated by a handle or lever, dispense coins, currency or tokens and chips.
- Proposition 1 would require that at least 90 percent of all HHR revenue be returned to bettors, while another portion of the proceeds will be distributed to public schools, purse funds, horse breeders, and Idaho Horse Council youth programs.
- Proposition 1 spells out how revenue from historic horse racing is distributed for public schools and other programs. Specifically, it requires 1 percent of gross daily historic horse racing receipts be paid to the Idaho Racing Commission, which would then be required to distributed monies accordingly:
- One-half of one percent (.50%) to the Public School Income Fund, estimated at about $600,000 from Les Bois Park based on 2015 receipts.
- One-fourth of one percent (.25%) of $300,000, of gross daily receipts to the racing commission account within the state regulatory fund. This account is used to cover the commission’s operating costs and regulation of live horse races.
- One-tenth of one percent (.10%) of gross daily receipts to the track distribution account within the pari-mutuel distribution fund, which is used to build purses at smaller tracks.
- One-tenth of one percent (.10%) of gross daily receipts to the breed distribution account, to be split evenly between the Idaho thoroughbred and quarter-horse breeders.
- One-twentieth of one percent (.05%) of gross daily receipts to the Idaho Horse Council youth programs account.
- The initiative makes very clear where wagering on HHR terminals will be allowed:
- At any facility located within the grounds or enclosure where live and/or simulcast horse racing is conducted, and where at least 8 live horse race days are conducted annually. This includes Les Bois Park and other smaller tracks throughout the state.
- Any facility where simulcast wagering is subject to Idaho code 54-2514a(1). This could apply to the Greyhound Park and Event Center in Post Falls.
Since the 2015 repeal of HHR terminals, Les Bois Park has shut down and racing at other facilities is minimal. That decision by politicians in Boise has in effect severed a key revenue stream that is legal in many other states and allows live racing to flourish.
Revenue from HHR terminals is important because it goes to boosting the purses that tracks like Les Bois can offer to breeders, trainers and jockeys. In turn, bigger purses make Idaho a more competitive and attractive racing venue. It’s no secret that horse owners across the West set their racing schedules each year based on the highest purse values and level of competition.
During the period HHR terminals were in operation, purse values were increasing. For example, Treasure Valley Racing (which operates at Les Bois Park) reported:
- Average purse at Les Bois in 2013 was $5,124; $8,285 in 2014; and $8,047 in 2015. (These were the years HHR terminals were in play).
- Before HHR, average purses surpassed the $5,000 mark just once, in 2005.
In addition, revenue from HHR wagering helps cover the high operating costs at tracks and aids breeders and youth programs statewide. Idaho’s horse racing industry doesn’t receive any support from the state. This includes the racing commission, which is funded solely on revenue generated within the industry.
The horse racing community has tried for several years to get the Idaho Legislature to consider solutions to revive the state’s horse racing industry. These efforts focused specifically on the industry sustaining itself, without any public subsidies or taxpayer support. These good-faith attempts were stymied by confusion, misinformation and misunderstanding — creating even more uncertainty about the future of Idaho horse racing.
The Idaho Constitution provides another path to change public policy—the ballot initiative. We believe there is significant public support for horse racing in the state and seek to protect the sport’s legacy and restore the jobs that have been lost or migrated elsewhere in the last three years. We believe that voters, when fully informed of the facts, support reinstating HHR terminals and the pivotal role that revenue has in supporting horse racing.
The Save Idaho Horse Racing campaign is about restoring horse racing and the industry that’s been built around the sport. Supporting the campaign means supporting the restoration of an industry, restoring the jobs that support it and generating prosperity across the state.
Horse racing means many things to the state and local economies. Races draw breeders, trainers, jockeys and vendors to the track. Many live outside of Boise or in other states, meaning money during the racing season is spent on hotels, food, gas, feed and other supplies. When the tracks are open and operating, hundreds of people are employed there.
There is also an economic ripple effect felt in rural areas as trainers and breeders hire more helping hands, buy more feed and other supplies locally.
A Boise State University study in 2015 concluded the racing industry injected more than $50 million annually into the state’s economy. When Les Bois Park shut down in 2015, 285 jobs were lost. Statewide, more than 585 jobs have been lost or migrated to other states.
As for public schools, the initiative is very clear on the potential benefit to students, teachers and classrooms. According to ballot language, if approved, one-half of one percent — or 0.50% — of HHR revenue would be deposited into the Public School Income Fund. Based on 2015 HHR receipts, and other pari mutuel betting at the tracks, this translated to about $600,000 directly going to the Public School Income Fund.
The ballot language is very specific regarding where the terminals can operate. According to the initiative, pari-mutuel wagering using HHR terminals would be allowed at and limited to existing horse racing tracks authorized to conduct live and/or simulcast wagering and where at least 8 live horse race days are held each year.
The effect of this precise language is intended to limit where HHR terminals/wagering is allowed by law. Opponents who claim HHR betting will create a vast proliferation of gaming across Idaho are misleading voters with scare tactics that aren’t borne out by the facts.
Unlike other casino-style gaming in Idaho, betting on horse races — live or using HHR terminals — is transparent and regulated by the state.
Like the Idaho Lottery, horse racing is accountable to a government agency. The role of the Idaho Racing Commission, a self-funded state agency whose commissioners are appointed by the governor, issues an annual report documenting live racing, simulcast and pari-mutuel betting. The agency’s mission is supported financially by fees collected through licensing, pari-mutuel and simulcast wagering.
Created under Idaho law, the IRC has the authority to regulate racing and wagering and write rules and regulations to maintain the integrity of the sport and its participants. State law and the ballot initiative requires that TVR would have to report annually the revenue generated by pari-mutuel HHR terminals and wagering on live horse races.
Tribal casinos operating in Idaho don’t operate with the same level of scrutiny or transparency.
- Idaho law allows for three forms of gaming: state lottery; bingo or raffle games and pari-mutuel betting. While the law doesn’t define pari-mutuel, a key decision by the Idaho Supreme Court provided the following guidance for pari-mutuel:
The pari-mutuel system is a term of art for the mathematical method by which the amounts to be paid to successful patrons is computed. All money paid into the system is paid out to patrons except for a small percentage retained by the state and fair board pursuant to the act. Odds on a particular horse are determined only by the amount of money paid on such horse by patrons in comparison with other horses in the race.
- The initiative seeks to amend state law to allow pari-mutuel betting on HHR terminals in limited locations and spells out the specific distribution of revenue for schools, purses, breeders and youth programs.
- Existing state law requires that pari-mutuel betting be regulated and audited by the state.
Idaho would not be unique in reliance on alternative sources of revenue to support live horse racing. Historic horse racing is legal in neighboring states like Oregon and Wyoming and earlier this year, lawmakers in Virginia authorized historic horse racing to support live horse racing in that state. Altogether, 22 states allow some form of gaming to bolster live racing and enable the sport to survive without government assistance.
The legality of these terminals has been challenged in other states, in most cases by groups opposed to all forms of gaming on moral grounds. Historical horse racing terminals have survived challenges in states like Kentucky, where the technology was first introduced. Today, revenue from historic horse racing helps live racing at tracks like Kentucky Downs and contributes to local and state economies.
The Idaho Attorney General issued what’s called a Certificate of Review as part of his statutory duty to look over all proposed ballot initiatives. In that document, the Attorney General did not reach any conclusion about the legality – or constitutionality – of Proposition 1 or specifically historic horse racing.
Instead, the Attorney General said the question of whether historic horse racing is legal under Idaho’s pari-mutuel betting definition “is likely to draw a legal challenge.” In other words, the Attorney General does not provide an official legal opinion on historic horse racing, but merely suggests other parties may turn to the courts to settle an issue that has survived legal challenges in other states.
It should also be noted that in 2012, the Idaho Attorney General issued an opinion on historic horse racing as part of the Legislature’s review of the technology. In that opinion, the Attorney General, citing case law from California, concluded: “I think that it is most likely that the Supreme Court of Idaho would adopt a similar construction of the meaning of casino gambling and conclude that pari-mutuel betting on historical races … is not casino gambling.”
The simplest explanation lies on how winning players are determined. For slot machines, like those found in tribal casinos, winning is based on chance. Slot machines operate with a system that generates winning numbers at random. There is no skill involved in collecting a payout, just luck. Historic horse racing is just like placing a bet at the track before a live race. Winners are determined based on how the horses finish and the wager placed.
Slot machines can be plugged into any socket in your house and they will work just fine. That’s not the case with historic horse racing terminals, which can only work if they are connected to a network that pools bets and conforms to pari-mutuel betting.
Opposition to Proposition 1 is coming from the Coeur d’Alene Tribe, which operates a successful casino in north Idaho. The tribe, along with its lobbyists and political action committee, see any other form of gaming as a threat to its monopoly on gaming in Idaho.
What’s interesting is that the tribe won the ability to offer casino-style gaming in 2002 when it asked Idaho voters to support a ballot initiative legalizing blackjack and other video gaming machines. It’s unfortunate and ironic that the tribe and its paid political operatives are now fighting against the same approach – and arguments – they used 16 years ago to convince Idahoans on the merits of gaming.