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Oct 18, 2024

Lawmakers discuss local HHR permit approval, national horse betting, HHR machine cap | Local News | wyomingnews.com

Jayvion Taylor places bets on a historic horse racing machine at Wyoming Downs in Cheyenne. CHEYENNE — Lawmakers reviewed a slew of bills Friday that aim to reshape regulation of Wyoming’s gaming

Jayvion Taylor places bets on a historic horse racing machine at Wyoming Downs in Cheyenne.

CHEYENNE — Lawmakers reviewed a slew of bills Friday that aim to reshape regulation of Wyoming’s gaming industry, which has exploded into a billion-dollar business after new forms of gambling were legalized in the state more than a decade ago.

In May, members of the Legislature’s Joint Appropriations Committee created a working group to study the gaming landscape and see if legislative action is needed to rein in its rapid expansion. Some lawmakers, such as Rep. Tom Walters, R-Casper, have received complaints from their constituents that gambling machines are taking over their favorite bars.

Walters, who chaired the working group, told the Wyoming Tribune Eagle one of the group’s objectives was to find a way to slow down and control the number of historic horse racing machines that are popping up in Wyoming communities.

“For the last two years, when I returned home from the (legislative) session, the biggest thing I’ve heard about is the expansion of casinos in Wyoming, and that’s how the general public views them as, is casinos,” Walters said.

One of seven bill drafts discussed during the committee’s Friday meeting in Douglas, titled “Quantity and locations for historic horse racing devices,” limits each operator to 10 simulcasting locations, with a minimum of 25 machines and a maximum of 400 machines per location. Walters told the committee the intent of the bill is to set that limit statewide, so an operator could only have 10 locations in Wyoming.

Walters also said the bill takes a stab at defining HHR machines. Legislative counsel Tamara Rivale explained to lawmakers that the term “HHR machine” is not currently used in statute, which creates problems for the Legislature when working on HHR-related issues. She admitted the definition provided in the bill is “wordy and confusing.”

“The working group bantered about multiple ideas — from doing population caps to hard caps per operator — and settled on this one, knowing that there might be some issues with it,” Walters said Friday, adding it was more of a conversation starter.

Laurie Urbigkit, a lobbyist for Wyoming Horse Racing LLC, said her organization does not support the bill and believes this is a local control issue. Wyoming Horse Racing currently has “touristic” off-track betting sites, with one near the Colorado border in Cheyenne.

“The majority of our advertising money is in Colorado. Our goal is to take their gaming money and create Wyoming taxes and Wyoming jobs without money,” Urbigkit said. “We are getting ready to start another one in Evanston on the Utah border.”

The floor plan for the Cheyenne location includes 940 machines, although there are currently fewer than 400 devices, Urbigkit said. Wyoming Horse Racing also plans to add two restaurants, a 300-room hotel and a theatre.

The organization invested approximately $25 million into the Cheyenne facility, she said, and $18 million into the Evanston location.

“This really puts a damper on our tourist attraction concept,” Urbigkit said, “so obviously we are opposed to the bill.”

Wyoming Downs spokesperson Neal Tomlinson, which currently operates 20 locations, also said the bill could hurt businesses and put a cap on potential revenue. 307 Horse Racing CFO Kyle Ridgeway said his organization was sensitive to the bill’s intent, but lawmakers should first study the market temperature for HHR machines before trying to place a cap on it.

He said the Wyoming Gaming Commission is statutorily required to analyze whether the market is saturated before approving applications for a new gaming device. The WGC is in the process of putting together a feasibility study on gaming in Wyoming, in conjunction with the JAC. The report will consider the social impacts of gaming sites and is expected to be ready by mid-October, according to WGC Deputy Director Nick Larramendy.

Committee co-chairman Sen. Dave Kinskey, R-Sheridan, doubted whether a cap on HHR machines is the right path, saying he was concerned it could create “distortion.” A similar cap was passed on liquor licensing when people were concerned there was too much liquor, Kinskey said.

“We see how marvelously unsuccessful that’s been,” Kinskey said.

Bill draft 51, “Local approval for historic horse racing permitting,” gives local municipalities authority to approve HHR machines. This bill was first introduced to the JAC during its June meeting, and has been revised since then to include recommended draft language proposed by the Wyoming County Commissioners Association.

The draft allows cities, towns or counties to approve HHR machines, depending on where the machine is located, and would “allow the local governments to impose conditions and revoke permits under specified circumstances,” according to Rivale. It also outlines conditions for revoking or approving a permit, and local governments may continue to be a part of the renewal process.

“Now, if an operator has locations in both city and county within the same area, they would ultimately be getting approval from both,” Walters said. “Each location would only require one approval by a singular entity.”

Ridgeway raised concern that the bill lacked a grandfathering clause for existing operators. He said operators have historically worked with counties to establish their locations, but he’s worried how that might change if cities were allowed to revoke those permits.

“That implies closure, if the city says no and there’s not a standard in here for an existing operator,” Ridgeway said. “Especially if you’re dealing with a new regulatory body, if it’s in the form of a city instead of the county.”

Committee co-chairman Rep. Bob Nicholas, R-Cheyenne, said such a standard is outlined in the bill, which states the local government must have good cause to revoke a permit. Kinskey said he was worried the bill’s language was too broad and could create unintended consequences by handing the reins over to local governments without more specific guidelines.

Sen. Mike Gierau, D-Jackson, said horse racing tracks around the country are closing, and bill 232, “Interstate export of Wyoming horseracing,” is the perfect opportunity to showcase Wyoming races, especially one in particular.

The Horse Palace Swan Ranch is a $25 million indoor horse race track that recently opened its doors in Cheyenne in June, and Gierau said he’s heard talk of potentially broadcasting events across the nation.

“We could become the place where horse racing comes, and become the center of it,” Gierau said.

The biggest concern with national betting, however, is compliance with federal regulations. The federal government sees national simulcasting as a form of interstate commerce, which is regulated at the federal level.

The Horseracing Integrity and Safety Act (HISA) was passed by Congress in 2020 and implemented “a horse racing anti-doping and medication control program and a racetrack safety program.” Bill draft 232, “Interstate export of Wyoming horseracing,” would allow Wyoming horse races, which are currently only regulated by the WGC, to become HISA compliant and allow national betting.

The bill also creates a 6% tax on net proceeds, which would go into the state’s general fund. Rivale said some states are suing the federal government, saying it is unconstitutionally allowing the Horseracing Integrity and Safety Authority, a private entity, to enforce legislative regulations.

“It does look like, at least in some circuits, they’ve had some success with that argument,” Rivale said.

Larramendy said HISA does not allow wagering on thoroughbred races — only quarter horse racing. But there’s a market for thoroughbred horse racing, he said.

“Thoroughbred is really what the wagering public looks for,” Larramendy said. “Those are the fun races.”

Tomlinson said Wyoming Downs currently does not export their horse racing signals because “the fees are so cost prohibitive.” Adding a 6% state tax would make it even less worthwhile, he said.

“Certainly, we’d be interested in doing it if there was a chance to make a profit on it,” Tomlinson said. “But we’re not in the business to lose money, so we’re not interested in sending the federal government our money.”

Wyoming Horse Racing LLC is the only business that exports its quarter horse racing signals, which run 18 days a year, Urbigkit said. It’s not very profitable, she added, with an average net revenue of $400 a day. With the 6% state tax, she said the state would earn $432 for the year.

“I’m just not thinking that this bill is really bringing in a lot of money for you,” she said.

Despite doubts on how much the state could make on national betting, Gierau remained optimistic about the idea.

“I’ll bet you $1 that 10 years ago, if I just said (Wyoming Horse Racing LLC is) gonna build a $25 million track on the Wyoming-Colorado border, you’d say ‘You’re crazy,’” Gierau said. “Never say never.”

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Hannah Shields is the Wyoming Tribune Eagle’s state government reporter. She can be reached at 307-633-3167 or [email protected]. You can follow her on X @happyfeet004.