Why this audit is important
The horse racing industry, which has been regulated for almost a century, faces challenges around its financial stability.
Oregon Racing Commission (ORC) commissioners have broad authority over all aspects of animal racing and wagering in the state. This oversight includes live, simulcast, and historical races.
ORC regulates over $6 billion annually from wagering on races conducted inside and outside of Oregon. The state receives about $3 million each year, with the majority going to ORC to support Oregon horse associations and those running horse race meets.
Controversy around proposed HHR machines at The Flying Lark in 2021 had ORC commissioners publicly disagreeing with the Attorney General’s opinion.
What we found
Wagering on horse races has dramatically evolved from attending live race meets at tracks within Oregon to placing bets using electronic methods on races outside the state. Ambiguous state gambling laws have resulted in mixed interpretations of what constitutes legal wagering within Oregon. As technology changes, laws and rules need to be better defined to ensure there are no conflicts between existing statutes authorizing pari-mutuel gambling with Oregon’s constitutional prohibition of casinos.
ORC did not have a full commission for nearly three years, only recently having five commissioners as of Spring 2023. It also has long-standing commissioners overdue for successors to be appointed. These situations can lead to issues such as burnout and meeting quorum if commissioners have emergencies or those with expired terms decide to leave.
ORC allocates money to financially support summer race meets, commercial races, and Oregon horse associations. There is limited oversight and transparency of how those funds are approved, distributed, and used.
ORC has procedures for overseeing and conducting reviews of Historical Horse Racing (HHR) machines but was missing key documentation of its past oversight conducted when Portland Meadows had HHR machines, which stopped in 2019. We were unable to assess the extent of the oversight performed given this lack of documentation.
What we recommend
We made four recommendations to ORC. ORC agreed with all of our recommendations. Additional recommendations were made to the Legislature and Governor’s Office. The response can be found at the end of the report.