Judge rules in favor of commissioners, denies motion to delay enactment of horse racing resolution

GILLETTE — On Friday, a district judge denied a motion for a preliminary injunction against a recently passed county resolution that essentially gave 307 Horse Racing control over off-track betting within 100 miles of Gillette.

That means that as of Saturday, the two Wyoming Downs locations in Gillette, as well as the Gillette Horse Palace, had to shut down that part of their businesses.

Because 307 Horse Racing has an exclusive contract with Cam-plex to conduct live horse racing through 2025, that means that if nothing changes, Wyoming Downs and the Horse Palace must remain closed to off-track betting for the next five years.

A few hours after the decision, Eric Nelson, managing member of Wyoming Downs, wrote in an email to the News Record that because of Friday’s decision, “Wyoming Downs may cancel or will reduce (its) season to nothing. All employees in Gillette will lose (their) jobs.”

After listening to hours of testimony and arguments from both sides Friday afternoon and evening, District Judge F. Scott Peasley ruled against Wyoming Horse Racing and Wyoming Downs, which claimed the Campbell County commissioners overstepped their authority. They asked Peasley to delay the resolution so they could remain open.

On April 20, the commissioners passed a resolution that gives the live horse racing operator 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.

307 Horse Racing’s first live horse races were held Saturday, meaning that with the resolution, the three off-track betting locations in Gillette can’t operate for the next five years.

Peasley said that based on the limited evidence presented Friday afternoon, he “can’t say the commissioners did not have the right to pass the resolution.”

The plaintiffs’ attorneys cited a 2014 case, Wyoming Downs LLC v. Board of County Commissioners for the County of Sweetwater. 

In that case, the Sweetwater County Commission denied Wyoming Downs’ request to open an off-track betting location because commissioners wanted to support Wyoming Horse Racing.

Then-Judge Keith Kautz reversed the decision on the grounds that “economic protectionism by itself is not a legitimate state interest.”

Traci Lacock, an attorney representing Wyoming Downs, said the Sweetwater case showed “a desire to protect another competitor from the competition. That’s exactly what’s occurring in this current action.”

Attorney John Sundahl, representing the county commissioners, argued that the claim that the commissioners wrote and passed this resolution to favor 307 Horse Racing over the other two operators is false.

He said there is a “huge distinction” between the two cases. 

In the Sweetwater case, it was clear that one company was being favored over another, Sundahl said. With Campbell County’s resolution, because it doesn’t name any specific operator, there is only one way to interpret it.

“The only reading is that it is neutral. It doesn’t favor anybody,” he said. “Anyone can come in and institute OTBs under that resolution.”

While the resolution does not name any live horse racing operator, 307 Horse Racing signed an exclusive five-year contract last year to hold live horse races at Cam-plex, essentially making it the only company that can do off-track betting here.

Eugene Joyce, president of Wyoming Horse Racing, said that while no names are mentioned, the resolution “sure as heck favors one company over another,” and that the commissioners passed it “knowing full well that 307 (Horse Racing) had an exclusive contract.”

Commissioner Colleen Faber, who drafted the resolution, said she did not know 307’s contract was exclusive until the April 20 meeting where the resolution was passed.

Tom Thompson, another attorney representing the commissioners, said the resolution does not prevent Joyce from building another race track in Gillette. That would allow him to do off-track betting here.

“Nobody, and I mean nobody on this planet, is going to build another race track in Campbell County,” Joyce said, adding that it would cost as much as $30 million.

Thompson asked if there was anything prohibiting Joyce from building a race track in Gillette.

“Common sense,” Joyce said.

“Anything else?” Thompson asked.

“Common sense,” Joyce said again.

Peasley agreed with the defense’s argument that the resolution is not choosing favorites because no specific names are included. He did not see it as an example of “economic protectionism,” as the businesses tried to argue.

As a publicly elected board, the commission has “the right to make a decision that it believes in the best interest of the county,” Sundahl said.

“The potential irreparable harm is extraordinary,” Lacock said.

From dozens of employees losing their jobs to Wyoming Downs and Wyoming Horse Racing losing the customer base and good will they’ve built up in the community over the better part of a decade, the companies will suffer from the resolution, Lacock said.

Eric Nelson, managing member of Wyoming Downs, said that if the two Gillette locations shut down, “25% of our revenue would be lost,” and it would have to lay people off and reduce the number of live horse racing days it has in other parts of the state.

“If you’re forced to close and then reopen, will it injure your reputation? No question,” he said.

“Why should the entities that are here, paying taxes, why should they be shut down when there’s no harm to the other side?” asked Matt Micheli, an attorney representing Wyoming Horse Racing.

It costs a lot of money to train employees, Nelson said, and if they’re out of a job, “it’s not like they work at Burger King and they can walk across the street to McDonald’s.”

“You shouldn’t believe that there is irreparable damage that can’t be remedied,” Sundahl said. “That’s not true. Loss of jobs isn’t irreparable damages, expending money isn’t irreparable damages.”

There’s nothing prohibiting former employees of Wyoming Downs and Wyoming Horse Racing from applying to work for 307 Horse Racing, he said.

Joyce, who conducted live horse racing at Cam-plex from 2015-19, said he was ready to hold races at Morningside Park in June 2020, but then COVID hit. He also had been working to extend his contract with Cam-plex.

He’d hoped to get alternate dates in August and September, but then Cam-plex told him those dates were no longer available because of an exclusive contract with another horse racing operator.

Joyce said he didn’t like how the whole thing went down, and that if Cam-plex allowed it, “I’d be back there in a heartbeat.”

“Why not have no contract with anyone and have Cam-plex put out an RFP?” Joyce asked, referencing a bid process for live horse racing at the facility.

The plaintiffs argued that they didn’t receive proper notice that the commissioners would take action on the resolution at their April 20 meeting. Nelson said he didn’t find out until the night before, and he was not able to make the meeting. Joyce said a lobbyist called him saying there was a rumor that the commissioners were going to shut down his OTB locations in Gillette.

County Commissioner Del Shelstad said he talked to Joyce on April 16, the Friday before the meeting, and that Joyce brought up the resolution at that time.

“Our (county) attorney was trying to facilitate a meeting between the operators,” Shelstad said, adding that Joyce asked for that meeting to happen before the commissioners took action on the resolution.

Thompson said the fact that Joyce was able to show up to the meeting and participate is proof that proper notice was given.

A meeting was held April 26 with all three operators with the hopes of reaching an agreement. Nelson said that in that meeting, he “made no effort” to reach a solution and that if the resolution wasn’t rescinded, he would file a lawsuit.

“I didn’t want to get taken into a place that I thought was illegal,” he said.

In 2013 and 2014, the commission approved Wyoming Downs and Wyoming Horse Racing to do off-track betting here. Micheli said that it is the only power the commissioners have in this area and that they cannot just take away approval once it’s given.

“The power to grant includes, by necessity, the power to change … the power to revoke and the power to replace,” Sundahl said. “This is, quite simply, a legitimate exercise of legislative authority.”

If the court interferes with that legislative decision, Sundahl said that “takes us into a slippery slope, which is frightening.”

Nelson said he’s “very concerned” about investing in anything at Cam-plex, because the commissioners “could shut me down at any point.”

The resolution goes against opinions by the Wyoming Attorney General’s Office and the Wyoming Gaming Commission and sets a dangerous precedent, Micheli said, one where individual counties can choose to shut down out-of-county companies to favor their local businesses.

“If we pit counties against each other, the system could collapse,” he said.