Campbell commissioners sued over horse racing
GILLETTE — Two Wyoming live horse racing outlets are betting that a lawsuit they’ve filed against the Campbell County Commissioners will pay off in their favor.
Wyoming Horse Racing and Wyoming Downs have filed an injunction against a resolution the commission passed this spring that gives control over off-track betting and simulcasting activities to whoever is operating live horse racing in the county.
Without a ruling in their favor, when live horse racing starts its season at Morningside Park on Saturday, Wyoming Horse Racing and Wyoming Downs in Gillette will basically be abruptly out of business, and dozens of people will be unemployed, according to their lawsuit.
The injunction asked the 6th Judicial District Court to scratch the resolution out of the gate. The businesses claim they will “both suffer catastrophic and irreparable harm if the resolution is not stayed.”
The lawsuit accuses the commissioners of playing favorites. The resolution passed April 20 is “an exercise in crony capitalism” and is “illegal, beyond the scope of their authority, arbitrary and capricious, and has zero basis in objective fact, logic, or law,” it says.
It also alleges that the commissioners are “intentionally seeking to destroy two businesses.”
Wyoming Downs and Wyoming Horse Racing are represented by attorneys Matthew J. Micheli and Macrina M. Sharpe with Holland and Hart, and Robert C. Jarosh and Traci L. Lacock with Hirst Applegate. Both firms are out of Cheyenne.
The companies also are asking for a declaratory judgment that the commissioners exceeded their statutory authority and jurisdiction in passing the resolution.
Wednesday, the commissioners hired a pair attorneys to represent them in the suit.
As of Friday morning, no hearing had been scheduled for the civil action that had been filed with District Judge Thomas Rumpke. And the case that had been assigned to District Judge John R. Perry has been reassigned to District Judge Scott Peasley of the Eighth Judicial District.
The resolution gives the county’s exclusive live horse racing operator — in this case 307 Horse Racing — control over off-track betting and simulcasting in the county. It also allows that written permission for simulcasting and off-track betting can be given to groups that aren’t putting on live horse races, but those agreements would have to be worked out between the contracted live racing company and its potential competitors.
In 2013, Campbell County Commissioners approved resolutions allowing Wyoming Horse Racing and Wyoming Downs to conduct parimutuel wagering in the county. This followed the passage of a bill, co-sponsored by former Rep. Sue Wallis, R-Recluse, that allows for the simulcasting of parimutuel events, also called historic horse racing.
Based on those 2013 decisions, Wyoming Downs and Wyoming Horse Racing have operated in Campbell County since.
In 2020, 307 Horse Racing signed an exclusive contract with Cam-plex to conduct live horse racing at Morningside Park for the next five years.
Wyoming law states that “no simulcasting may be conducted within 100 miles of any premises” where live horse racing happens. 307 Horse Racing argues that it has full rights to any off-track betting machines within 100 miles of Cam-plex for the whole year.
The injunction said that 307 Horse Racing asked the Wyoming Gaming Commission to demand that the other two operators shut down in Campbell County. The Gaming Commission denied the request, and 307 Horse Racing then asked it to remove the rule. The Gaming Commission decided to keep the rule in place.
The Wyoming Attorney General’s opinion was that 307 Horse Racing would have the rights to those machines only on race days, or 16 days out of the year. The Wyoming Gaming Commission came to the same conclusion.
307 Horse Racing then went to the Campbell County Commission, which passed its resolution giving a live horse racing operator control of off-track betting. Because of 307 Horse Racing’s exclusive contract with Cam-plex, it is essentially the only operator that can have off-track betting.
Commissioner Colleen Faber, who drafted the resolution, said off-the-track betting operations “are part and parcel to live horse racing,” and that operators should not be operating OTBs if they are not also running live horse races.
Instead of control only on its race days, the commissioners gave 307 Horse Racing carte blanche for the next five years because of its exclusive contract, the other operators argue in their lawsuit. The resolution, in effect, kills a pair of businesses that have been operating for eight years without problems.
“They are attempting to directly overturn and overrule state statute, an Attorney General’s opinion addressing that statute, a state agency rule and a unanimous state agency decision doing exactly the opposite” of the resolution, their attorneys wrote.
In passing the resolution, the commissioners “decided to change and effectively revoke” the approval “without any meaningful public notice or due process considerations,” the attorneys wrote.
The resolution “imposed illegal restrictions on the approval of simulcasting,” stripping Wyoming Downs and Wyoming Horse Racing of their vested rights without due process of law.”
The injunction also accuses commissioners of acting beyond the their authority.
State statute delegates authority over parimutuel activities to the Wyoming Gaming Commission, and leaves “a very small role for county commissioners,” according to the injunction. The commissioners’ role is to grant approval for those activities to take place in their county.
By giving Wyoming Downs and Wyoming Horse Racing approval to do off-track betting in 2013, the commissioners created a vested right and do not have the power to take that away, the attorneys wrote.
The commissioners also are being accused of not giving proper, legal formal notice of the April 20 meeting.
As of 9 a.m. April 19, there was no public notice or agenda posted to the county’s website.
Typically, the county posts meeting agendas the Friday before Tuesday meetings. An agenda was posted later Monday morning, but that was less than 24 hours before the start of the meeting.
As a result, Wyoming Downs did not have enough time to participate or make public comment, the attorneys wrote.
The commissioners “simply desired to cost two private entities millions of dollars in lost investment and more importantly cause dozens of people to lose their jobs without even pretending to have any evidence or basis for making that decision.”
If the resolution is not stayed, their three off-track betting locations in Gillette will have to shut down May 22, the attorneys wrote, which will “injure the reputation and goodwill of both parties.”
Wyoming Downs and Wyoming Horse Racing have spent years and millions of dollars building up their businesses and developing a loyal customer base. If they closed down, about 50 jobs would be lost. If they reopened, not all of the former employees would return to work for them, and finding and training new workers is “something that cannot be adequately compensated through damages.”
The commissioners passed the resolution on a 4-1 vote, with Commissioner D.G. Reardon the lone dissenting voice.
“I don’t think it’s right that we pick winners and losers in a free market system,” Reardon said, adding that all of them should be allowed to operate in Campbell County.
“It’s definitely government overreach,” he said. “We’re picking who’s going to be in Campbell County, who’s going to have carte blanche control over off-track betting. I just didn’t think that was right.”
Commissioner Del Shelstad said that during the process leading up to the passage of the resolution, he felt that Wyoming Horse Racing and Wyoming Downs “were being deceitful, trying to get the Gaming Commission to take their side.”
“I think they were being spiteful, they didn’t want 307 in,” Shelstad said.
And when he saw that a bill had been introduced in this year’s Legislature to abolish the 100-mile radius rule, “that told me we were doing the right thing.” That bill, House Bill 25, failed in the House on a 23-37 vote.
Faber, who drafted the resolution, said there shouldn’t be off-track betting if there is no live horse racing going on.
“We have the best horse racing track in the state. The county needed to step up and encourage that track to be used,” she said.
In the last several years, the city and county have received more than $5 million combined in tax revenue from the historic horse racing machines.
“The amount of revenue live horse racing brings in will be significantly higher than the small percentage off of the facilities,” Faber said.
She said the controversy stems from the fact that there’s now a third company putting on live horse races.
“There’s going to be some bumpy spots when there’s a new competitor,” Faber said.
As for the Wyoming Gaming Commission ruling against 307 Horse Racing, Faber said it’s a situation of “this commission getting their feet under them, not wanting to dive into something that could look like a controversy.”
Thursday morning, Commissioner Rusty Bell said he voted for the resolution because “I’m trying to do what’s best for Campbell County.” He would not say anything more on the issue based on the advice of the commission’s legal counsel.
Faber, Shelstad and Reardon spoke with the News Record on Tuesday, before outside legal counsel was hired Wednesday.