Back payments dispute
The Belterra Park racino in Cincinnati, Ohio is facing a $2.7m lawsuit for allegedly withholding video lottery game revenue. The proceeds were to go to the Ohio Horsemen’s Benevolent and Protective Association (OHBPA). In addition to the $2.7m in damages, the OHBPA is also seeking interest and attorney fees.
The racing association filed the lawsuit on December 18 with the US District Court for the Southern District of Ohio in Columbus. According to the lawsuit, Belterra Park did not pay the required share of proceeds from video lottery machines to the association between 2014 and 2018.
The horsemen’s association receives 9.95% of video gambling proceeds from racinos such as Belterra Park. The authorities only set this rate in June 2018, however, with the association collecting a placeholder 9% of proceeds until then. The lawsuit alleges that Belterra Park did not make up the difference, despite a requirement to do so.
Revenue sharing agreement
Video lottery terminals launched at Belterra Park in May 2014. The operator allegedly has not paid the horsemen’s association the 0.95% difference for the four-year period during which the placeholder rates were in place. The lawsuit states: “The OHBPA has been deprived of these funds, which go directly toward the benefit of horse breeding and horse racing in Ohio.”
The track gets to keep 66.5% of the revenue from the gambling machines.
Ohio lawmakers pushed through video lottery machine legalization in 2009. As part of the legislation, racinos had to share revenues between the track, the horsemen’s association, and the Ohio Lottery Commission. The track gets to keep 66.5% of the revenue from the gambling machines.
Out of the track’s share, they were to pay between 9% and 11% to the OHBPA. Of the total revenue from the gaming machines, 33.5% goes to the Ohio Lottery Commission, with these funds mostly going toward educational programs. It was not until June 2018 that the Ohio State Racing Commission set the actual rate of 9.95% allocated to the OHBPA.
Boyd Gaming Corporation, owner of Belterra Park, will not comment on the matter because of the pending litigation. Pinnacle Entertainment Inc. was the owner of Belterra Park from 2011 until 2018 and is a defendant in the lawsuit.
Boyd Gaming bought the track for $57.7m in 2018 from Pinnacle. Penn National Gaming was a part owner in the racino in 2018 and is also a defendant in this case.
The racino had to close its doors in mid-March because of the COVID-19 pandemic, reopening on June 19. Gaming revenue in the state hit an all-time monthly high in October. Rising numbers of virus cases in Ohio, however, led to a curtailment of operating hours for casinos and racinos in the state.