By TD Thornton
The Ohio Horsemen’s Benevolent and Protective Association (OHBPA) filed a federal lawsuit against the current and former owners of Belterra Park on December 18, claiming more than $ 2.7 in gaming revenue that OHBPA granted between 2014 and 2018 Withheld wrongly.
“This action is the result of the defendant’s failure to pay OHBPA its share in the net video lottery terminal [VLT] Commission from Belterra Park, ”said the complaint filed Friday morning with the US District Court for the Southern District of Ohio (Eastern Division). “These funds have been withdrawn from the OHBPA, which will directly benefit horse breeding and horse racing in Ohio.”
According to the complaint, when Ohio’s VLT games were first legalized in 2009, the state of Racinos approved to withhold 66.5% of revenue, with “between 9% and 11%” of that net revenue being paid to Thoroughbred and Standardbred entities.
These percentages were set five years before the actual VLT game in Belterra, and in 2012 the state authorized the Ohio State Racing Commission to set the actual rate for wallets based on this range of 9-11%. Until a new, fixed rate has been determined, 9% should be used as a placeholder for determining the wallet revenue.
“At all relevant times, OHBPA and Belterra Park have each understood that, according to the law, the actual percentage should be determined at a later date and that Belterra Park will make a“ true-up ”payment to OHBPA for every difference between the Wildcard rate of 9% and a statutory rate of more than 9%, ”the lawsuit alleges.
Belterra didn’t open to VLT games until May 1, 2014, largely as the former River Downs track underwent a major renovation to rename the property the Belterra Park Gaming & Entertainment Center. The investment for this project should be a factor in determining the new wallet billing rate, but the lawsuit alleges Belterra stalled and tried to overestimate the cost of repairing the property.
The complaint continued: “It is believed that the delay in setting the statutory rate was due to Belterra Park’s years of delay in submitting reasonable capital expenditures to the Ohio Facilities Construction Commission, which investment was the basis for the termination of the Percentage. “
“Belterra’s statements were unrealistic and overly aggressive attempts to convince the authorities that they were entitled to a lower statutory rate. This led to delays in the determination by the racing commission ”, it says in the complaint. “OHBPA had no access to Belterra Park’s records of alleged investments and no way to expedite interest rate fixing
On June 27, 2018, the Racing Commission finally set the percentage of Belterra Park’s Net Profit VLT Commission that it owed to OHBPA at 9.95% (retroactive and forward depending on the lawsuit).
And four days after that rate was set, OHBPA actually received its full 9.95% from Belterra.
The point of contention has to do with retrospective, however: OHBPA argues that Belterra never made up the four-year difference between the wildcard rate and the revised rate, which totaled $ 2,769,652.
“The OHBPA has requested the difference between the placeholder rate of 9% and the rate of 9.95%, which according to the law has been stipulated in its negotiations with Belterra since May 1, 2014 at various points in time, for example by offering alternative Methods for obtaining the earmarked funds, “claims the suit.” In fact, the Race Commission itself recognized that the real payment from Belterra Park was due and asked OHBPA if it would accept installment payments on the overdue amount. “
“OHBPA has the right to own the converted funds that are identifiable and traceable, but the defendants continue to withhold the converted funds from OHBPA,” the complaint said.
In addition, OHBPA is calling on the court to oblige Belterra and the other defendants to pay damages in the amount of USD 25,000 plus interest before and after the judgment, as well as OHBPA’s legal fees and court costs.
Belterra Park itself is named as a defendant, as is the current owner / operator of the Racino, Boyd Gaming Corporation.
David Strow, Boyd’s vice president of corporate communications, responded to an email request for comment from TDN that it was company policy not to discuss pending litigation.
Pinnacle Entertainment, Inc. (which, according to the lawsuit, belonged to Belterra between 2011 and 2018) and Penn National Gaming, Inc. (which, according to the 2018 lawsuit, had a brief stake in Belterra) are also listed as defendants.