Myths and Facts

Myth

The opposition is claiming that some of the money from horse racing never reached the public school fund and was spent illegally.

Fact

Again, this claim is false, and here’s why. The Idaho Racing Commission collected revenue from racing for the share that was due for two horse breeder groups in Idaho in 2014. But the commission was unable to determine before the end of the year which groups should benefit from HHR revenue. Under state law, any money left over in the breeder accounts should go to public schools. Instead, the commission held on to about $72,000, then distributed it to the breeder groups. Months later, an audit found the mistake and determined that the commission should claw back that money and deposit the funds in the public school account. That process of paying the schools is now complete and the state legislative auditor has declared the audit finding closed and appropriately addressed.

There are a couple of important points here. One, this mistake had nothing to do with Treasure Valley Racing. Two, Idaho’s system of oversight and accountability for the Idaho Racing Commission worked as its supposed to. Schools got the money as required under the rules.

Finally, Proposition 1 guarantees this oversight and transparency will continue if Historical Horse Racing is once again declared legal by voters. And, keep in mind that this level of public transparency and government accountability does not apply to the operations at tribal casinos.

Myth

The opposition claims that Proposition 1 is written in a way that will enable tracks to keep 18 times more money than public schools would receive.

Fact

This claim is false, and here’s why. Historical Horse Racing, which operates under a pari-mutuel system, returns 90 percent of wagers to the winning bettors, leaving 10 percent to cover other financial obligations. Operators like Treasure Valley Racing then send 1 percent of that revenue to the Idaho Racing Commission, which then distributes that revenue to public schools and other recipients.

So, that leaves 9 percent of HHR revenue for Treasure Valley Racing to pay a wide range of operating expenses. For example, TVR uses that revenue to pay water, sewer and power bills and for maintenance and upgrades to Les Bois Park. Unlike tribal casinos, TVR uses that HHR revenue to pay state and local taxes, wages and benefits for employees, and royalties to horsemen groups in other states that are part of the Historic Horse Racing system. TVR also deposits 13 percent of that HHR revenue, after taxes, into bolstering the purses for live races at Les Bois.

The total leftover after paying off those expenses and debts is the net profit that TVR –like all businesses – can keep. But here is something else to consider about those profits: The owners of TVR have committed 100 percent of its profits from all racing operations at Les Bois – including HHR – to a foundation dedicated to helping and supporting individuals, families and communities in rural Idaho.

As you can see, the claim that TVR is looking to enrich itself at the expense of public schools is both misleading and false.

Myth

Historical horse racing (HHR) terminals have nothing to do with live racing.

Fact

HHR Terminals are critical to the success of live racing. Revenue from HHR is essential to funding purses that help keep our tracks competitive with neighboring states that allow HHR terminals or other forms of gaming. Revenue from HHR will also be used to support thoroughbred and quarter horse breeder programs that ultimately improve the quality of the race horses that are born, raised and race here in Idaho.

Myth

Proposition 1 will lead to the spread of casinos across the state.

Fact

The ballot language is very specific regarding where HHR terminals can operate. According to the initiative, pari-mutuel-style HHR terminals would be limited to existing horse racing tracks that host at least 8 live racing days per year, or at tracks authorized to conduct simulcast wagering. The language also specifically prohibits slot machines.

Myth

You’re trying to legalize slot machines.

Fact

Historical Horse Racing (HHR) Terminals are a form of pari-mutuel wagering, which is legal under the Idaho Constitution. The HHR terminals operate completely different from slot machines, which determine winners using random number generation software – or in other words operate on chance. With HHR, patrons place bets similar to wagering before a live horse race, and if they so choose, can use handicapping data to inform their wagers. Winners are determined based on how the horses finish and the wagers placed within a pool of bettors. To put this another way, if you plugged a slot machine into any socket in your house, it would work just fine as winners are determined based on the internal random number generation software. HHR terminals, on the other hand, would not work properly if plugged in at home. The reason? HHR terminals can only work if they are connected to a network that pools bets, determines winners based on the numerous bettors, their wagers, and the race results. This difference is what clearly distinguishes slot machines (betting against “The House”) from live racing and HHR (pari-mutuel betting).

Myth

This will increase crime in my neighborhood.

Fact

There is absolutely no statistical evidence in Idaho showing an increase in crime attributed to HHR during the brief period the terminals were legal. Moreover, similar arguments were made years ago when Idahoans debated the pros and cons of a state lottery. As Gov. Butch Otter pointed out recently, those claims have not come to fruition. “Opponents of the Idaho Lottery threatened dire consequences, from gambling addiction to the influence of organized crime,” said Governor Butch Otter. “I’m pleased to say none of this has come to pass and am confident Idaho’s integrity will remain intact with the return of historical horse racing.”

Myth

Historical Horse Racing is not legal in Idaho.

Fact

Pari-mutuel betting is explicitly authorized under Idaho’s Constitution, and for years fans of live horse racing, at tracks big and small across the state, placed bets on the ponies. As for HHR terminals, the Legislature authorized their use in 2013 and for a short period the purses for live racing, attendance at the tracks, and race days increased statewide. But in 2015, big casino interests and lobbying efforts created a politics-as-usual scenario and lawmakers consequently went back on their commitment to live racing. So, after several years of working to reverse that policy decision, supporters of live racing and our state’s horse industry are letting the people decide the matter at the ballot box.

Myth

Historic Horse Racing won’t generate any meaningful amount of money for public schools in Idaho.

Fact

The fact is Idaho schools stand to gain if Proposition 1 passes. The language of Proposition 1 clearly dedicates a percentage of revenue from the HHR terminals to the Public School Income Fund. From Boise’s Les Bois Park alone in 2015, nearly $600,000 was deposited into that state fund. With the few other tracks that meet the necessary live racing requirements to operate HHR terminals, even more money will be generated for public school classrooms, teachers and students.

Myth

This proposition will only line the pockets of a few wealthy people.

Fact

Unlike casino-style games, HHR and the pari-mutuel form of betting, by statute, must return at least 90 percent of the money wagered to bettors. Because of this premise, HHR is not lucrative like casino gaming, where the house edge is often much higher and not established in statute. Furthermore, of the remaining 10% that isn’t returned to bettors, statute requires that certain percentages of the gross receipts from HHR are directly allocated to horse and youth programs and to public schools. Then, there are the high costs of operating a track, including large staffs, maintenance, and the funding of purses for winning jockeys and owners. All told, the operating margins are fairly slim. The owners of Treasure Valley Racing who are funding the campaign are successful entrepreneurs, community leaders, and philanthropists. While they could invest their money and receive much greater returns in many other ways, they’ve invested in horse racing, because they’re passionate about the sport, the people, the culture, and the multitude of economic benefits it brings to communities throughout the state.

Myth

This will cost taxpayers even more money.

Fact

This will not burden or impact Idaho taxpayers in any way. Historical horse racing terminals are operated by private enterprise without any government subsidies. But that doesn’t mean this limited form of pari-mutuel wagering is free from government oversight. The Idaho Racing Commission, a state agency accountable to the Governor, is supported by fees collected through licensing of racing as well as pari-mutuel and simulcast activities. Each year, the IRC audits tracks and betting and prepares a public report for the Governor that accounts for racing and wagering statewide.

Myth

This only supports the horse racing industry.

Fact

A strong horse racing industry goes beyond what one sees at the track. There are years of preparation that go in to race days: breeders, trainers, farriers, equine veterinarians, and jockeys working day in and day out to raise and compete horses at the highest level. These jobs and economic benefits bolster the heart of Idaho and our rural communities, and it’s time to restore an industry that has forced many people to take their skills, resources and quality horses elsewhere.

Myth

Idaho already has a thriving economy. We don’t need horse racing.

Fact

It’s true Idaho’s economy is humming. But that doesn’t mean that some of our rural communities aren’t having a tough time. For Idaho’s horse racing industry, that’s been the case. Since HHR terminals were repealed in 2015, horse trainers, breeders, and owners have either been forced to leave the state to work with horses in a more competitive industry or curtail their involvement in a horse racing tradition that for some has been part of the family for generations. This decline has had a ripple effect on veterinarians, farriers, local feed and tack shops and other businesses that catered to people with horses.

Myth

If horse racing is legal, and pari-mutuel betting is legal, this ballot initiative should be unnecessary.

Fact

The question we are putting to voters is: “Should the limited use of Historical Horse Racing terminals be allowed in Idaho?” We are also reaffirming that HHR terminals are a form of pari-mutuel wagering (unlike slot machines) that help fund purses at the tracks, as well as horse and education programs and public schools. Proposition 1 clears up any ambiguity as to what HHR terminals are and are not.