Judge Rules Belterra Owes Ohio HBPA $2.7M In ‘Deprived’ VLT Money

A money disagreement that has simmered for nearly a decade got a step closer to settlement Thursday when a federal judge ruled the Ohio Horsemen's Benevolent and Protective Association (OHBPA) is entitled to $2,769,652 in gaming revenues that the present and former owners of Belterra Park withheld between 2014 and 2018.

The dispute arose from Belterra's failure to pay the OHBPA its share of net-win video lottery terminal (VLT) commission from Belterra Park. The quarrel was exacerbated when the two sides disagreed over the rate that was supposed to be the horsemen's lawful cut and whether or not retroactivity applied to that rate, with the OHBPA alleging that Belterra's withholding of money over a four-year period amounted to “unjust enrichment.”

The Mar. 30 order by Judge Algenon Marbley in United States District Court for the Southern District of Ohio (Eastern Division) is not a final judgment. But the judge did write that, “this Court finds that statute requires Defendants to pay Plaintiff the [higher] 9.95% rate from May 1, 2014, to June 30, 2018 [and that] having found that no reasonable jury could find for Defendants on Plaintiff's unjust enrichment claim, this Court GRANTS summary judgment on this issue.”

Dave Basler, the OHBPA's executive director, told TDN via phone Friday morning that the horsemen were pleased with the ruling.

“We felt throughout that that was money that was owed to the horsemen, and felt strongly that that was something that we needed to pursue legally until it was resolved,” Basler said. “The money obviously would be a benefit to our purse account.”

The initial complaint filed Dec. 18, 2020, explained that 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.

That range of percentages was 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 the horsemen. But until a new, firm rate got set, 9% was to be used as the placeholder to determine purse proceeds, according to an escrow agreement negotiated between Belterra and the commission.

Belterra didn't open for VLT gaming until May 1, 2014, largely because the track formerly 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 complaint alleged that Belterra stalled and tried to overstate the costs it incurred fixing up the property, an allegation that Belterra denied.

Eventually, on June 27, 2018, the racing commission set the percentage of Belterra Park's net-win VLT commission that it owed to the OHBPA at 9.95%. The OHBPA interpreted that rate to mean both retroactively and moving forward, while Belterra argued that the OHBPA was not due any retroactive funds, because Belterra and the commission had negotiated over the catch-up payments and had factored that aspect into the escrow agreement.

Four days after that final rate was established, the OHBPA did, in fact, begin receiving its full 9.95% from Belterra. But the bone of contention that led to the lawsuit had to do with the retroactivity surrounding the remaining .95% beyond the 9% stipulated in the escrow agreement. The OHBPA argued that Belterra never made good on the four-year difference between the placeholder rate and the revised rate, which is how the plaintiffs arrived at the $2,769,652 figure.

“Here, Plaintiff argues, because Belterra Park was the only racino in the state with which Plaintiff failed to reach agreement on the VLT commission rate, the parties entered a temporary 'escrow agreement' of 9% pending an administrative ruling by the Racing Commission,” the Mar. 30 order stated.

“Plaintiff maintains that the Escrow Agreement was only meant to be temporary; it could not set the commission rate because it was not a method authorized by the statute. As such, Plaintiff argues, the 9.95% commission rate must be backdated because the statute considers only one fixed rate that is to be applied from the moment the first coin is dropped,” the order stated.

The judge agreed with the HBPA's reasoning, explaining the decision this way: “This Court finds the best way to apply the statute is to do so based on its plain meaning. Plaintiff was due payment using a rate determined by the Racing Commission in the absence of an agreement with Belterra Park. The Racing Commission did eventually determine a commission rate of 9.95%. This commission rate is thus applicable for the entire period that Belterra Park operated its VLT gaming.

“Indeed, the statute provides that the Racing Commission must set the rate within six months. This did not happen. No authority indicates, however, that the Racing Commission's tardiness has any relevance to this case. As such, this Court finds that statute requires Defendants to pay Plaintiff the 9.95% rate from May 1, 2014, to June 30, 2018,” the order stated.

The OHBPA had also asked to be paid prejudgment interest on the outstanding payment. But the judge denied that request at the Mar. 30 summary judgment stage on a legal technicality because the plaintiffs failed to state whether they sought the interest “pursuant to statute or common law.”

The order did state, though, that the OHBPA could file a separate motion for prejudgment interest, which leaves that aspect of the case open for the time being.

Also unknown at this stage is whether the defendants plan to appeal. There are multiple parties involved on that side of the case.

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.

David Strow, Boyd's vice president of corporate communications, answered a Friday query from TDN about a possible appeal by emailing that the company did not wish to comment on the court order at this time.

The post Judge Rules Belterra Owes Ohio HBPA $2.7M In ‘Deprived’ VLT Money appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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OTBO Mixed Thoroughbred Sale Draws Record Entries

The annual Ohio Thoroughbred Breeders and Owners Mixed Thoroughbred Sale is to be held at the Delaware County Fairgrounds in Delaware, Ohio, Wednesday Oct. 19 and it has drawn enthusiastic participation. The sale will start at 2:30 p.m. The grounds are open for previews/inspections at noon Oct. 18.

There are a record-setting 120 entries with a variety of prospects among the 23 weanlings and 74 yearlings as well as 2-year-olds and broodmares. The 2022 edition of the sale includes a 36-entry dispersal from Mapleton Thoroughbred Farm, which has been atop Ohio's accredited program as breeder and owner for many years. The state offers year-round racing at three venues-Jack Thistledown Racino, Belterra Park Gaming, and Hollywood Gaming at Mahoning Valley Racetrack. There are 43 stakes held annually for Ohio-breds with purses totaling over $3.5 million distributed.

The complete catalog can be found at the OTBO website. Any further questions, please call Mike Annechino, Executive Director of the OTBO, at (330) 356 8350.

The post OTBO Mixed Thoroughbred Sale Draws Record Entries appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Mahoning Valley Cancels Monday Card Due To Lingering Winter Storm Impact

Live racing on Monday, February 7 at Hollywood Gaming Mahoning Valley Race Course has been cancelled due to the lingering effects of winter storm Landon.

Live racing is scheduled to resume Tuesday, February 8 with a first race post time of 12:45pm.

The simulcast theater will remain open.

Hollywood Gaming Mahoning Valley Race Course races Monday, Tuesday, and Wednesday with a first race post time of 12:45 p.m. and Saturday with a first race post time of 12:15 p.m.

The 2022 Winter/Spring race meet dates run January 1, 2022 – April 16, 2022.

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‘Just Tragic’: Death Of Maiden In His First Start Since 2016 Could Spur Change In Ohio

The death of Mox Nix, an 8-year-old maiden gelding in the eighth race at Belterra Park in Cincinnati on Sept. 28, could result in new regulations in Ohio racing, according to the new executive director of the state commission.

Mox Nix failed to finish in the maiden claiming contest, where he was in for a $7,500 tag for owner/trainer Robert C. Bennett. He was pulled up between the quarter and half mile poles in the six-furlong contest and euthanized by commission veterinarians due to a fracture in his left hind leg.

The race was his first in nearly five years, as the gelding had been off track since finishing ninth in a maiden special weight at Mahoning Valley in Youngstown, Ohio, on Oct. 31, 2016.

The gelded son of Zanjero was more than 30 lengths off the winner in that race, and was subsequently put on the veterinarian's list in Ohio for a bowed tendon on his right front leg. He remained on the list despite a long period of inactivity, and per commission regulations was required to perform a workout of at least four furlongs in under 52 seconds before a commission veterinarian. According to Chris Dragone, who recently assumed the role of executive director at the Ohio State Racing Commission, that work was completed and duly observed by a veterinarian, and the horse passed an examination following the workout.

There was a gap in Mox Nix's workouts leading into the late September race. He posted a four-furlong breeze at Belterra in :51.71 on July 9, a :50.90 breeze on July 26, and a five-furlong breeze in 1:05.01 on Aug. 3. Then, he didn't work again until Sept. 10, when he went four furlongs in :50.35.

A commission vet also gave the horse an extra look in the paddock ahead of his Sept. 28 race. Dragone noted that the fatal injury was not in the leg that had sustained the bow back in 2016.

Bennett did not respond to multiple interview requests for this story.

The guidelines for how and whether a horse may race after a long layoff, or at what age the horse may race, vary from place to place. Those guidelines are sometimes part of a commission's regulations, but racetracks may also impose their own restrictions on whether they will take an entry. While each race has its own conditions for recent finish position and racing class, race meetings may also have minimum performance requirements for horses to stable or race on the property. This may include achieving a minimum placing within a period of time, or may exclude horses that have failed to achieve a placing above a particular claiming level in a specified period. Those requirements would be listed in the introductory pages in the physical copy of a track's condition book.

(The Paulick Report looked at minimum performance requirements set out by racetracks in this 2016 piece about claiming racing.) 

Typically, tracks that run cheaper races have lower minimum performance requirements or higher ceilings for maximum age of a runner. Dragone said he was aware that there were minimum performance requirements in place at Mahoning Valley and JACK Thistledown Racino, but was not certain if Belterra had similar policies.

Bill Couch, racing secretary at Belterra, did not return calls seeking comment.

Dragone said last week that the commission had launched an investigation into the death of Mox Nix, but that early indications were that Bennett had not violated any state regulations in entering and running the horse.

Currently, the only restrictions the Ohio commission places on runners is that they must be serviceably sound, cannot be wearing a trachea tube, cannot have undergone a nerving surgery, and cannot have impaired sight in both eyes. There are no further regulations about maximum age, maximum layoff time, or performance.

Dragone said he expects that to change.

“An eight-year-old maiden on a five-year layoff – just tragic,” said Dragone. “We're in discussions at the commission about drafting a rule because we don't have anything on the books right now that would have prevented this. Tragic, but [Bennett] did not break any rules and all the procedures were followed that we could tell, but that doesn't solve the problem, so I think we're going to need a rule to make sure this doesn't happen again.

“We're investigating it. We're taking it very seriously and it will not happen again.”

The post ‘Just Tragic’: Death Of Maiden In His First Start Since 2016 Could Spur Change In Ohio appeared first on Horse Racing News | Paulick Report.

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