Ohio HBPA Sues Belterra to Recoup $2.7M in VLT Money

The Ohio Horsemen's Benevolent and Protective Association (OHBPA) filed a federal lawsuit against Belterra Park's present and former owners Dec. 18 seeking more than $2.7 in gaming revenues that the OHBPA is claiming the track wrongfully withheld between 2014 and 2018.

“This action arises from Defendants' failure to pay the OHBPA its share of net-win video lottery terminal [VLT] commission from Belterra Park,” states the complaint filed Friday morning in United States District Court for the Southern District of Ohio (Eastern Division). “The OHBPA has been deprived of these funds, which go directly toward the benefit of horse breeding and horse racing in Ohio.”

According to the complaint, when VLT gaming was first legalized by Ohio in 2009, the state authorized racinos to retain 66.5% of revenues, with “between 9% and 11%” of those net-win proceeds to then be paid to Thoroughbred and Standardbred entities.

Those percentages were set five years before any actual VLT gaming happened at Belterra, and in 2012 the state authorized the Ohio State Racing Commission to set the actual rate that would go to purses, based upon that 9-11% range. But until a new, firm rate got set, 9% was to be used as the placeholder to determine purse proceeds.

“At all relevant times, the OHBPA and Belterra Park each understood that, pursuant to the statute, the actual percentage rate was to be set at some future time, and that Belterra Park would need to make a 'true-up' payment to the OHBPA for any difference between the 9% placeholder rate and a statutorily-set rate that was greater than 9%,” the suit contends.

Belterra didn't open for VLT gaming until May 1, 2014, largely because the former track known as River Downs was undergoing a substantial renovation to rebrand the property as Belterra Park Gaming & Entertainment Center. The capital expenditures for that project were to be a factor in determining the new calculation rate for purse money, but the suit alleges Belterra stalled and tried to overstate the costs it incurred fixing up the property.

The complaint continues, “Upon information and belief, the delay in setting the statutory rate was due to Belterra Park's years-long delay in providing to the Ohio Facilities Construction Commission a submission of reasonable capital expenditures incurred, such capital expenditures being the basis for the setting of the percentage rate.”

“Belterra's submissions were unrealistic and overly aggressive attempts to persuade the authorities that it was entitled to a lower statutory rate; this caused delays in the determination by the Racing Commission,” the complaint alleges. “The OHBPA had no access to Belterra Park's records of purported capital expenditures, and no way to expedite the rate-setting

process.”

Eventually, on June 27, 2018, the racing commission set the percentage of Belterra Park's net-win VLT commission that it owed to the OHBPA at 9.95% (both retroactively and moving forward, according to the suit).

And four days after that rate was established, the OHBPA did, in fact, begin receiving its full 9.95% from Belterra.

But the bone of contention has to do with retroactivity: The OHBPA is arguing that Belterra never made good on the four-year difference between the placeholder rate and the revised rate, which it claims totals $2,769,652.

“The OHBPA has demanded the difference between the 9% placeholder rate and the 9.95% rate set pursuant to the statute in its negotiations with Belterra at various times since May 1, 2014, by, for example, proposing alternative methods of receiving the earmarked funds,” the suit contends. “Indeed, the Racing Commission itself has acknowledged that the true-up payment from Belterra Park is due and has asked the OHBPA if it would accept installment payments on the past-due amount.”

“The OHBPA has a right to possess the Converted Funds, which are identifiable and traceable, yet Defendants continue to withhold the Converted Funds from the OHBPA,” the complaint asserts.

In addition, the OHBPA is asking the court to make Belterra and the other defendants pay $25,000 in damages, plus pre- and post-judgment interest and the OHBPA's attorney fees and court costs.

Belterra Park itself is named as a defendant, as is the racino's current owner/operator, Boyd Gaming Corporation.

David Strow, Boyd's vice president of corporate communications, answered a request for comment from TDN by emailing that it is company policy not to discuss pending litigation.

Pinnacle Entertainment, Inc., (which, according to the suit, owned Belterra between 2011 and 2018) and Penn National Gaming, Inc. (which, according to the suit, briefly had an ownership interest in Belterra in 2018), are also listed as defendants.