Oregon Racing, Inc. v. Oregon State Lottery

485 P.3d 912, 310 Or. App. 281
CourtCourt of Appeals of Oregon
DecidedMarch 31, 2021
DocketA168343
StatusPublished

This text of 485 P.3d 912 (Oregon Racing, Inc. v. Oregon State Lottery) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oregon Racing, Inc. v. Oregon State Lottery, 485 P.3d 912, 310 Or. App. 281 (Or. Ct. App. 2021).

Opinion

Submitted September 24, 2019, affirmed March 31, 2021

OREGON RACING, INC., Petitioner, v. OREGON STATE LOTTERY, Respondent. Oregon State Lottery Agency A168343 485 P3d 912

Oregon Racing, Inc. (ORI), which operated a card room at the Portland Meadows racetrack, sought a declaratory ruling from the Oregon State Lottery as to whether two of ORI’s practices—(1) charging a door fee to all patrons in the area used for poker playing and (2) exchanging players’ chips and holding their money during poker games—disqualified ORI from the “social games” exception to statutory prohibitions on unlawful gambling. The Lottery issued a declaratory ruling in which it concluded that the door fee generated “house income” for ORI and the chip exchange made ORI a “house bank,” meaning that ORI was not operating a “social game” as defined in ORS 167.117(21), and, thus, in essence, that ORI’s operations were unlawful gambling. ORI seeks judicial review of that ruling. Held: The ordinary meaning of “house bank” includes a gambling estab- lishment’s supply of chips for purchase and use by players in a poker game, and nothing in the text, context, or history of the statute evidenced the legislature’s intent to restrict the term to a dealer against whom bets are placed or the sum of money used by the house; accordingly, the Lottery correctly concluded that ORI’s practice of exchanging players’ money for chips and holding and safeguarding players’ money during gameplay meant that ORI was acting as a “house bank” for purposes of ORS 167.117(21). The phrase “house income from the operation of the social game” most plausibly referred to any benefit that the “house” derived not from the mere presence of the social game (such as increased food and beverage sales or attendance) but from the operation of the game itself—including fees for accessing the games; thus, the Lottery correctly concluded that the door fees charged by ORI to enter the area for playing poker were “house income” under ORS 167.117(21). Affirmed.

William L. Rasmussen and Miller Nash Graham & Dunn LLP filed the briefs for petitioner. Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Carson L. Whitehead, Assistant Attorney General, filed the brief for respondent. Craig J. Dorsay, Lea Ann Easton, and Dorsay & Easton LLP filed the brief amicus curiae for The Confederated Tribes of Siletz Indians. 282 Oregon Racing, Inc. v. Oregon State Lottery

Before Lagesen, Presiding Judge, and DeVore, Judge, and Powers, Judge. LAGESEN, P. J. Affirmed. Cite as 310 Or App 281 (2021) 283

LAGESEN, P. J. This case involves a dispute between Oregon Racing, Inc. (ORI) and the Oregon State Lottery over the correct interpretation of state gambling laws. ORI, which operated a card room at the Portland Meadows racetrack,1 sought a declaratory ruling from the Lottery as to whether two of ORI’s practices—(1) charging a door fee to all patrons in the area used for poker playing and (2) exchanging play- ers’ chips and holding their money during poker games— disqualified ORI from the “social games” exception to statu- tory prohibitions on unlawful gambling (and, consequently, from obtaining a video-lottery retailer contract). See ORS 183.410 (describing the process for obtaining a declaratory ruling from an agency with respect to applicability of stat- utes or rules the agency enforces). The Lottery then issued a declaratory ruling in which it concluded that the door fee generated “house income” for ORI and the chip exchange made ORI a “house bank,” meaning that ORI was not oper- ating a “social game” as defined in ORS 167.117(21), and, thus, in essence, that ORI’s operations were unlawful gam- bling. ORI now seeks judicial review of that ruling. See ORS 183.410 (providing for review of declaratory rulings in the same manner as an order in a contested case). Reviewing the Lottery’s construction of the terms “house income” and “house bank” for errors of law, Rhine v. Racing Comm., 40 Or App 651, 656, 596 P2d 576 (1979), we affirm. BACKGROUND For purposes of the declaratory ruling, the par- ties stipulated to the relevant background facts, which we draw from the Lottery’s ruling. ORI operated the Portland Meadows racetrack (before it was torn down) and had a retailer contract with the Lottery for video lottery termi- nals. ORI and other public establishments in Portland with those contracts (collectively, “retailers”) also provided space 1 It came to our attention that Portland Meadows racetrack has since closed and the buildings have been razed. The parties have represented ORI is still operating a card room and that the issues decided by the Lottery still present a live controversy. Based on the representations of the parties, we agree and proceed to the merits of their arguments. We state the facts about the Portland Meadows premises and card room in the past tense in recognition of the reality that the track at this point is Portland history. 284 Oregon Racing, Inc. v. Oregon State Lottery

and coordination for poker games on the premises, among other entertainment and services. The poker games were exclusively among players with no affiliation to the retail- ers, and the retailers had no stake in and earned no direct income from the play of the games (for example, there was no commission for operating the game, no tournament entry fees, and no per-hand rake from the games). The poker games operated according to rules published by national poker organizations, and the retailers did not set gaming odds. At ORI’s premises, poker games were held in a lim- ited part of the Portland Meadows campus referred to as the Gaming Room. The Gaming Room had poker tables, large- screen monitors that provided information about the poker games, a dedicated bar, dedicated food service, large-screen TVs with an upgraded sports package, and other diversions, including ping pong, video golf, E-games, chess, cribbage, and fantasy sports. ORI charged a $15 door fee to each patron who entered the Gaming Room, and that fee was the same regardless of whether or not a patron played a poker game in the Gaming Room. ORI did not typically charge a door fee for access to other parts of the Portland Meadows campus.2 To facilitate the poker games, ORI provided chips to the players. The players exchanged money for the number of chips that they would like to have available for play. ORI secured that money during gameplay and then returned all money to players at the end of each gaming session. The amount of money returned to an individual player depended on the type of game that the player was playing. For some games, one or more of the players who won the most chips received monetary prizes based on the amount of chips that they won, while other players did not receive any money back. For other games, each player received money in proportion to the number of chips that the player won or lost during play. ORI did not earn income or other- wise profit from safeguarding the players’ money during gameplay.

2 The exceptions were the Third Floor Turf Club during events and special events that involved a door charge to enter the Portland Meadows building. Cite as 310 Or App 281 (2021) 285

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Related

State v. Gaines
206 P.3d 1042 (Oregon Supreme Court, 2009)
Vasquez v. Double Press Mfg., Inc.
437 P.3d 1107 (Oregon Supreme Court, 2019)
Rhine v. Oregon Racing Commission
596 P.2d 576 (Court of Appeals of Oregon, 1979)

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Bluebook (online)
485 P.3d 912, 310 Or. App. 281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oregon-racing-inc-v-oregon-state-lottery-orctapp-2021.