Idaho Prop 1 backers claim it boosts horse racing, but opponents say it mostly benefits private owners
Proponents of Idaho’s Proposition 1 – which would legalize virtual betting on historical horse races using video terminals – claim it will revitalize the horse racing industry in the Gem State and support public schools. But opponents argue it mostly will authorize gambling machines that will pump profits into the hands of three private interests.
And the only company that will immediately benefit from the new law is owned by a man, Paul W. Bryant Jr., whose father helped make Alabama football the powerhouse that it is today.
Bryant, the son of legendary Alabama coach Paul W. “Bear” Bryant, is the owner of Alabama-based Greene Group Inc. The group owns Greyhound Park and Event Center in Post Falls, which is the only venue that could immediately turn on the gambling machines if voters approve Prop 1.
“They could have written the ballot initiative any way they wanted, but they chose to include the Greyhound Park in Post Falls,” said Natalie Podgorski, spokeswoman for Idaho United Against Prop 1. “Which calls into question, is this really about horse racing? If it is, why is a defunct dog track going to be allowed to have these machines?”
Todd Dvorak, a former Associated Press bureau chief and current spokesman for Save Idaho Horse Racing, acknowledged that most of the gaming profits would go to the owners of the machines.
Those owners include a businessman from Idaho Falls, Greene Group and Treasure Valley Racing, which owns the lease at Les Bois Park in Boise and until seven years ago was an equal business partner at that track with Bryant’s company, Greene Group.
Treasure Valley Racing is owned by five prominent Idaho businesspersons who have pumped all of the $2.07 million to support the initiative through Save Idaho Horse Racing: Robert Rebholtz Jr., Larry Williams, Linda Yanke, Harry Bettis and John Sheldon.
“They are serious philanthropists and very successful business people,” Dvorak said. “They have said they don’t care about profits. All they care about is getting horse racing back up in Idaho.”
In September, TVR announced the creation of a new nonprofit, the Treasure Valley Racing Foundation, to be funded by the profits from racing operations at Les Bois Park. Those profits would include revenue generated by historical horse racing.
In a news release, TVR said the foundation would invest in “families in rural communities and the next generation of young people interested in careers in agriculture.”
“With those goals in mind, we will be dedicating 100 percent of the net profits generated by Treasure Valley Racing operations to the foundation. Let me repeat: All of the net profits from racing will go to supporting charitable causes across our state,” Rebholtz stated in the release. “Our efforts and motivations for reviving Idaho’s horse racing industry has never been about our own financial enrichment.”
Although they had a prior business relationship, Bryant and Greene Group have not supported the campaign, Dvorak said.
“In 2011, Treasure Valley Racing bought out the Greene Group,” Dvorak said. “Since then they have not associated with them in any shape or form.”
The effort is opposed by Idaho United Against Prop 1, which has raised $2.7 million to oppose the initiative, with most of that financial support coming from the Coeur d’Alene Tribe, which sees the gaming machines as competition to its casino in Worley.
In a statement provided to The Spokesman-Review, Coeur d’Alene Tribe Chairman Ernie Stensgar said the tribe’s casino provides about $13 million in local and state taxes every year.
“Conversely, Prop 1 was written so that very little money goes to Idaho’s communities, leaving most of it for the authors of the initiative,” Stensgar wrote. “A plain reading of the measure shows that the track owners funding this effort will keep 18 times more money than public schools will receive.”
Gift horse
How the initiative helps the Idaho horse industry remains in the eye of the beholder.
The law only requires that gambling machine owners turn over one-tenth of 1 percent of their proceeds to support purses at small racetracks.
For perspective, 2015 was the last year the machines were allowed at Les Bois Park, Greyhound Park in Post Falls and Double Downs in Idaho Falls.
The gambling machines at those three locations raked in a combined $103.9 million. Of that total, some $519,676 went to public schools and $207,689 went to purses for future races at small tracks.
“They are arguing that … increasing race purses would revive the industry and that’s why we need these machines,” Podgorski said. “We think it’s really a weak (argument). This has nothing to do with horse racing. It has everything to do with bringing Las Vegas-style gaming machines to Idaho.”
The machines, which have been collecting dust since 2015, look much like the slot machines found in a casino. They have lights and bells, and connect to a database provided by an independent contractor. The database contains an archive of past horse races.
Gamblers can’t determine when or where the previous race was run, but can, if they choose, hit a button that shows the odds for a particular horse on a particular day. After choosing the horse, they push a button and can watch the race or push another button and simply get the results, Dvorak said.
Under Idaho law, some 90 percent of the gambling proceeds must go back to the gamblers. Dvorak pointed out that in 2015, more than 92 percent went back to gamblers.
Another percentage of the take, one-fourth of 1 percent, goes to the state regulatory fund, which is used to regulate the machines.
That regulatory burden would currently be a challenge for the cash-strapped Idaho State Racing Commission. Chairman Jim Hammond, of Post Falls, said the three commissioners only meet once every three months.
Because they have no funds to travel, they conduct their meetings over the telephone. The commission only has one full-time staffer who does everything, Hammond said.
“We are managing,” Hammond said. “There is not any state money that goes into the board. We have to be self-sustaining.”
The commission hasn’t replaced its executive director since Frank Lamb resigned in February 2015 after news surfaced that he’d been working as a paid lobbyist for a company operating the same type of instant racing machines in Wyoming, while regulating them in Idaho.
If the law passes, “we’ll probably go back to having an executive director and an assistant,” Hammond said. “If there are more races, you need more folks to monitor those races.”
Battle at Greyhound Park
The manager of the Greyhound Park Event Center is Doug Okuniewicz, who works for Greene Group. Efforts to contact Okuniewicz on Friday were unsuccessful.
His titles include general manager of Coeur d’Alene Racing, which manages the park, and president of AIM Management Inc., which appears to be a holding company for patents for gaming machines.
According to a search of the company website, Okuniewicz owns several patents for a “slot machine” and a “player tracking system.”
Several sources confirmed that Okuniewicz works for Bryant, who stepped down in 2015 from the University of Alabama board of trustees. He and the late Athletic Director Mal Moore both raised tens of millions of dollars, including $20 million from Bryant, to upgrade facilities prior to Alabama hiring Nick Saban in 2007.
Okuniewicz said in a previous story that Bryant, sometimes known as “Little Bear” in deference to his father, owns two large dog tracks in Texas. One of those tracks reportedly earned $268 million in 1993, according to the Texas Racing Commission.
In a previous interview, Okuniewicz said the Greyhound Park in Post Falls has been losing money for years and said he didn’t see any future “other than some sort of retail” if the machines were not re-authorized.
“We’ve been operating at a loss for years,” he said in 2015, “with the hope that one day we could get legislative approval to expand gaming and … maybe keep the place kicking.”
But that track has a long history of disappointments.
The track opened in 1988 for live greyhound racing, but that came to an end in 1995 after allegations of dog abuse and big financial losses. Idaho lawmakers outlawed dog racing in 1996.
Then in 1998, the Coeur d’Alene Tribe wanted to purchase the track and build its casino there. But then-Gov. Phil Batt would not allow the tribe to build a casino off its reservation.
Asked if he could understand why the tribe wouldn’t want legalized gambling at the same site at which they were denied, Dvorak said he didn’t have a reaction.
“We are not here to litigate what happened with Gov. Batt decades ago,” he said. “We are here to revive live horse racing through a restricted form of gambling.”
The initiative would override the Legislature’s 2015 repeal of the law that originally allowed the gambling machines.
The repeal in 2015 was vetoed by Gov. Butch Otter, but the Idaho Supreme Court later overturned that veto, saying it came too late. Earlier this month, Otter endorsed the initiative.
But some 60 persons, both Republican and Democrat, have signed with the opposition. They include Kootenai County Prosecutor Barry McHugh, state Rep. Maxine Bell, R-Jerome, and former Kootenai County Sheriff Rocky Watson.
“We believe that the Legislature made a mistake in 2015,” Dvorak said. “I don’t think there is any doubt that the Legislature was hoodwinked by cosmetics. They didn’t look at the fundamental differences between historical horse racing and slot machines.
“And voters now have an opportunity to right that political wrong.”
This story was altered on Sunday, October 21 to include a statement by Treasure Valley Racing stating that it would donate the net revenue from its historical horse racing operation to a non-profit dedicated to Idaho communities.