Oregon Audits Division Releases Audit of Oregon Racing Commission
SALEM, OR — An audit released today by the Oregon Audits Division finds ambiguous state gambling laws have resulted in mixed interpretations of what the laws allow. This ambiguity poses risks to economic interests and sovereign Tribal nations. As technology changes, laws and rules need to be updated to minimize conflicts between existing statutes authorizing gambling on horse races with Oregon’s constitutional prohibition of casinos and limitation of lotteries.
The Oregon Racing Commission (ORC) has broad authority over all aspects of pari-mutuel wagering in the state. This oversight includes live, simulcast, and historical horse races. ORC collected approximately $7.8 million in revenues and over $1.4 million of that went to the state’s General Fund during the 2019-21 biennium.
The audit also found delays in filling and replacing ORC commissioners, ways to increase ORC oversight and transparency of funds allocated to support the horse racing industry, and limited documentation maintained of ORC’s reviews of historical horse racing machines.
The controversy around The Flying Lark’s request for 225 historic horse racing machines highlighted the contention among the state, Tribes, and private industry, revealing various concerns and complexity around constitutional allowability and regulation authority over such gambling.
The audit made four recommendations to the Oregon Racing Commission, two recommendations to the Legislature, and one to the Governor’s Office.
To increase oversight and transparency over pari-mutuel wagering, ORC should:
- Add requirement(s) either in policy or rule to evaluate, new and changes to, game and wagering operations to ensure there is no conflict with the Oregon Constitution and state statutes.
- Enhance rules and develop policies and procedures for allocating and reviewing the use of ADW hub funds.
- Ensure commission meeting minutes provide clear and transparent communication approval detail, including attachments received by the commission to inform action approval.
- Ensure documentation of its licensee reviews are maintained and safeguarded.
To address potential constitutional issues relating to casinos and provide clarity over state gambling and pari-mutuel wagering, the Legislature should consider:
- With stakeholder and Tribal input, providing additional clarity around the definition of a casino in state statutes.
- To manage technological advances, setting specific statutory limitations on elements of user interfaces and player experiences, for online and physical gambling products. This could include modifying related sections of ORS Chapters 167 and 462. Ensure limitations apply to those licensed by ORC.
To help maintain a full and renewed commission, the Governor’s Office should consider:
- Prioritizing the appointment of successors to replace commissioners who have multiple expired terms, as well as to fill all existing vacancies to those commissions delegated broad authority.
Read the full audit on the Secretary of State website.
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