The Ohio Horsemen's Benevolent and Protective Association (OHBPA) told a federal judge Mar. 23 that the present and former owners of Belterra Park are attempting to get out from under a $2.7-million lawsuit over gaming revenues that the track allegedly wrongfully withheld between 2014 and 2018 on the grounds that Ohio's statutory construct for racino revenue sharing offers horsemen no legal remedy when they are denied their fair share.
But in fact, the OHBPA states in a memorandum opposing Belterra's motion to dismiss the case, both common law and the state statute are on the side of the horsemen in allowing for exactly the sort of relief the OHBPA is seeking.
That's also what the OHBPA stated in its original Dec. 18 complaint that contended Belterra never made good on a four-year difference between a placeholder rate that was first established for video lottery terminal (VLT) gaming and an eventually revised rate.
The court filing states that the defendants “are holding [$2,769,652] in funds owed to [the OHBPA]. Belterra asserts that no claim can be made, or even exists under the law, so it gets to keep the money. An injury, perhaps, but no available relief, says Belterra. In essence, Belterra acknowledges it is the beneficiary of the windfall, then attempts to find cover from the General Assembly, the Ohio State Racing Commission, and an escrow agreement to which the OHBPA was not a party.”
The OHBPA states that Belterra's theory for dismissing the suit “rises and falls on the faulty notion that the statute at issue–Ohio Revised Code Section 3769.087(C)–essentially 'preempts the field,' and thus leaves a horsemen's association no recourse in cases of mishandled funds or revenue-sharing disputes between race tracks and horsemen. But Belterra has utterly failed to show that the statute forecloses private rights of action or common-law claims, citing no statutory language and no case law requiring such a result.
“Second, the OHBPA's Complaint states valid common-law causes of action upon which relief may be granted,” the filing continues.
“Lastly, the OHBPA states valid claims under a private-right-of-action theory. For these reasons, and those further set forth below, the Court should deny Belterra's Motion to Dismiss.”
Belterra Park itself is named as a defendant, as is the racino's current owner/operator, Boyd Gaming Corporation. Pinnacle Entertainment, Inc., (which, according to the suit, owned Belterra between 2011 and 2018) and Penn National Gaming, Inc. (which, according to the suit, briefly had an ownership interest in Belterra in 2018), are also listed as defendants.
According to the defendants' motion to dismiss filed Feb. 16 in United States District Court for the Southern District of Ohio (Eastern Division), the Belterra collective alleged that the “OHBPA has failed to state any viable claims against Defendants. OHBPA's cleverly labeled claims are nothing more than an attempt to plead around the fact that there is no private right of action under the relevant Ohio statute or regulation. Quite simply, OHBPA has no right to receive the “catch up” payments and only the Racing Commission is authorized to enforce [the relevant state codes] and the Resolution.”
According to the OHBPA's complaint, when VLT gaming was first legalized by Ohio in 2009, the state authorized racinos to retain 66.5% of revenues, with “between 9% and 11%” of those net-win proceeds to then be paid to Thoroughbred and Standardbred entities.
Those percentages were set five years before any actual VLT gaming happened at Belterra, and in 2012 the state authorized the Ohio State Racing Commission to set the actual rate that would go to purses, based upon that 9-11% range. But until a new, firm, rate got set, 9% was to be used as the placeholder to determine purse proceeds.
“At all relevant times, the OHBPA and Belterra Park each understood that, pursuant to the statute, the actual percentage rate was to be set at some future time, and that Belterra Park would need to make a 'true-up' payment to the OHBPA for any difference between the 9% placeholder rate and a statutorily-set rate that was greater than 9%,” the suit contended.
Belterra didn't open for VLT gaming until May 1, 2014, largely because the former track known as River Downs was undergoing a substantial renovation to rebrand the property as Belterra Park Gaming & Entertainment Center. The capital expenditures for that project were to be a factor in determining the new calculation rate for purse money, but the suit alleged Belterra stalled and tried to overstate the costs it incurred fixing up the property.
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