New State Audit Finds Oregon Racing Commission Disorganized, Losing Relevance as Betting on Animals Fades

Oregon Secretary of State LaVonne Griffin-Valade released an audit today of the Oregon Racing Commission, a tiny agency (fewer than 15 employees) that regulates horse racing and also handles nearly half of all money bet on horses in the nation. It also takes bets on greyhound racing, which has disappeared from all but one state (West Virginia) but is still going strong in other countries.

The 46-page document paints a picture of an agency trying to hold on to the past when horse racing occupied a bigger share of bettors’ minds—and attracted paying customers. A table in the audit captures the decline of horse racing in Oregon.

“Concerns of animal welfare have led to the waning and outlawing of greyhound racing throughout much of the nation,” auditors noted. “Oregon has also seen continual changes with horse racing venues and declines in horse breeding that have further impacted the stability of horse racing. Though Oregon has authorized other methods to gamble on horse races, according to stakeholders, betting on live horse racing is a vanishing industry that will likely cease to exist without intervention or subsidization.”

As WW reported earlier this year, Oregon two decades ago became the first state to accept bets on horses and greyhounds over the internet. Racing fans hoped that would provide an income stream that could support racing in Oregon. Online betting took off—Oregon booked more than $6.4 billion in wagers last year, nearly all of that from out-of-state bettors—but racing died. The Multnomah Kennel Club closed in 2004, and Portland Meadows, the state’s biggest horse track, closed in 2019.

What’s left behind, auditors found, is a lightly supervised, disorganized agency that brings in virtually nothing—less than $4 million a year—despite the billions of dollars that flow through its books.

Here’s what the audit found:

Sleepy oversight: “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,” auditors found.

A lack of accountability: “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,” auditors found.

Poor record-keeping: “ORC has procedures for overseeing and conducting reviews of Historical Horse Racing machines but was missing key documentation of its past oversight conducted,” auditors found. “We were unable to assess the extent of the oversight performed given this lack of documentation.” Auditors also found it difficult to track the Racing Commission’s biggest source of funds, the money that comes in from internet betting hubs. “ORC’s meeting minutes did not always provide clear information and detail about hub fund allocations and usage, raising questions about those funds,” they wrote.

One issue auditors highlighted is a problem, but not the ORC’s fault: “Multiple entities regulate gambling in Oregon. ORC oversees pari-mutuel wagering, the Oregon State Lottery runs the state lottery and sports betting, and the Department of Justice manages charitable and social gambling,” auditors noted. Add to that the state’s nine recognized tribes, which rely on gambling revenues, and Oregon has lot of different entities chasing limited gambling dollars in a regulatory environment in which auditors note “there is no clear definition of the term ‘casino’ except for in a narrowly applicable city planning and zoning law.”

The lack of clarity about what constitutes a casino became a big issue in 2021, when Travis Boersma, the co-founder of Dutch Bros. Coffee, attempted to expand Grants Pass Downs and install 225 historical horse racing machines. In 2022, the Oregon Department of Justice determined the machines were effectively video slot machines and therefore the project would violate Oregon’s prohibition on off-reservation casinos. The decision was big victory for tribal casinos and a bitter defeat for Boersma and the Racing Commission, which had backed him over the objections of tribes and then-Gov. Kate Brown.

The audit’s recommendations: Oregon needs to clarify and align its gambling laws to reduce friction and uncertainty, and the racing commission needs to keep better, more transparent records and do so under the supervision of a renewed, more engaged commission.

ORC director Connie Winn told auditors in a written response that she agreed with their findings and is already implementing their recommendations.

“The Oregon Racing Commission is in the midst of making bold changes to become a premier agency that is trusted and respected by all,” Winn wrote.