Did the Idaho AG flag legal problems with the 2018 historical horse racing initiative (Proposition 1)?
Subject
The Idaho AG's advisory Certificate of Review under Idaho Code § 34-1809 of the "Save the Horse Racing in Idaho Act," a citizen initiative that proposed adding three sections to title 54, chapter 25, Idaho Code (the Idaho Racing Act) to authorize wagering at "historical horse race terminals." The initiative qualified for the November 2018 ballot as Proposition 1 and was rejected by Idaho voters.
Currency note
This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. In particular, Idaho voters rejected the initiative as Proposition 1 in November 2018 by roughly 54% to 46%. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Plain-English summary
The proposed initiative tried to bring back a form of slot-style gambling that the Idaho legislature had repealed in 2015. The repeal was complicated: the Idaho Supreme Court held in Coeur d'Alene Tribe v. Denney that the Governor's veto of the repealing legislation was untimely, so the repeal stood. The 2018 initiative would have re-enacted (with changes) Idaho Code § 54-2512A and added two new sections authorizing "historical horse race terminals."
These terminals, also marketed as "Instant Racing," let bettors wager on past horse races shown on a video screen. Players see limited racing-form data, pick an order of finish, and the machine plays a clip of the actual race. Promoters describe the system as pari-mutuel because wagers go into a pool. Critics describe it as a slot machine wearing a horse-racing costume.
AG Lawrence Wasden's review flagged three substantive concerns:
The pari-mutuel question. Idaho's Constitution prohibits gambling but excepts pari-mutuel betting if conducted under enabling legislation. Whether "instant racing" wagering counts as pari-mutuel betting under art. III, § 20 was uncertain. The AG marshaled out-of-state authorities pointing the wrong way:
- Wyoming Supreme Court in Wyo. Downs Rodeo Events, LLC v. State (2006): "we are not dealing with a new technology here, we are dealing with a slot machine that attempts to mimic traditional pari-mutuel wagering. Although it may be a good try, we are not so easily beguiled."
- Nebraska AG (2010): instant racing "may be true that it can be said to involve parimutuel wagering in a broad sense," but unlike traditional pari-mutuel, "the pools also do not pertain to specific races." Truly pari-mutuel? Doubtful.
- Maryland AG (2009): in traditional pari-mutuel betting, players who pick the same winner share a pool. With instant racing, players are wagering on different races and never share a pool with another player. "This may be pooled betting, but it is not pari-mutuel betting as contemplated in the Maryland Horse Racing Act."
The AG concluded that adoption of the initiative would likely produce litigation over whether historical horse race wagering, conducted on these terminals, is constitutionally permissible pari-mutuel gambling.
Definitional gap. The 2015 repeal left untouched the existing definition of "historical horse race" in Idaho Code § 54-2502(3), which contemplates a race "rebroadcast by electronic means and shown on a delayed or replayed basis for the purposes of wagering conducted at a facility that is authorized to show simulcast and/or televised races." The proposed § 54-2512A(1) would have authorized terminals at a different and arguably broader set of facilities, creating a potential conflict the petitioners might have wanted to fix.
Severability directing future legislatures. Section 54-2512C added a clause stating that, if any term were declared unenforceable, "the legislature shall take all available steps to enact such term or provision in a legal, valid, and enforceable manner." The AG flagged this as hortatory only. Under Johnson v. Diefendorf, "[a] legislative session is not competent to deprive future sessions of powers conferred on them, or reserved to them, by the constitution." And under Gibbons v. Cenarrusa, "once a law is enacted in the initiative process it is like any other law. It may be amended or repealed by the legislature or subsequent initiative." So the directive could not bind a later legislature.
The recommendations were, by statute, "advisory only." Petitioners were free to revise the measure or proceed.
Common questions
Q: Did this initiative pass?
No. The measure became Proposition 1 on the November 2018 Idaho ballot and was defeated, with about 54% voting no. Idaho's gambling landscape did not change as a result.
Q: What is "historical horse racing" or "instant racing"?
It is a wagering format that uses video terminals to display brief, visually-stripped clips of past races. Players see partial racing-form data (winning percentages, jockey/trainer history, etc.) without knowing exactly which historical race is queued up. They wager on the order of finish, the terminal plays a clip, and payouts come from a betting pool that aggregates many different races. The product was originally developed by Amtote International and RaceTech, LLC.
Q: Why did several state AGs question whether this is pari-mutuel betting?
In traditional pari-mutuel wagering on a live race, all players bet on the same race. The pool of money is divided among those who picked the winner. The odds are set by the wagers themselves. Instant racing breaks both features: (1) different players are betting on different historical races, so the "pool" is not a pool on the same outcome; (2) odds are not produced by the players' collective wagering. Several AGs concluded that the format more closely resembles a slot machine that pays from an ongoing house-administered pool than the constitutional concept of pari-mutuel betting.
Q: What was the deal with the 2015 repeal that the initiative tried to undo?
In 2015, the Idaho legislature passed S.B. 1011 to repeal Idaho Code § 54-2512A and end legal historical horse race wagering. Governor Otter attempted to veto the repeal, but the Idaho Supreme Court held in Coeur d'Alene Tribe v. Denney, 161 Idaho 508, 387 P.3d 761 (2015), that the Governor's veto was untimely. The repeal therefore took effect. The 2018 initiative was the racing industry's effort to reverse the repeal at the ballot box rather than the statehouse.
Q: Can a citizen initiative bind future legislatures?
No. The AG noted two principles: (1) a current legislature cannot strip future legislatures of constitutional powers, Johnson v. Diefendorf; and (2) a law passed by initiative is like any other law and can be amended or repealed by a later legislature or by another initiative, Gibbons v. Cenarrusa. So an initiative's directive that future legislatures "shall take all available steps" to fix an invalidated provision is aspirational language with no enforcement mechanism.
Q: What does Idaho Code § 34-1809 actually do?
It requires the Attorney General to review every filed initiative within a tight statutory window and prepare an advisory Certificate of Review. The certificate covers form (proper drafting), style, and matters of substantive import. The AG cannot block the initiative; petitioners are free to ignore the recommendations. The certificate's job is to surface legal risks before signatures are gathered, so neither petitioners nor signers are blindsided later by drafting defects or constitutional problems.
Background and statutory framework
Idaho's gambling provision. Article III, § 20 of the Idaho Constitution prohibits gambling but excepts three specific forms: a state lottery, pari-mutuel betting on horse racing, and bingo or raffle games run by qualified charitable organizations. The provision does not define "pari-mutuel," leaving courts to fill in the term.
The 1963 baseline. The Idaho Supreme Court in Oneida County Fair Bd. v. Smylie upheld the original Idaho Horse Racing Act and accepted the petitioners' description of the pari-mutuel system: a mathematical method of paying winners from a pool, with money paid in distributed back to winning bettors less an administrative percentage. The Court reviewed out-of-state caselaw and held that pari-mutuel wagering on horse races is "not one solely based on chance" and so does not constitute a constitutionally-prohibited lottery.
Statutory definition. Idaho Code § 54-2502(8) defines "pari-mutuel" as a system whereby "wagers with respect to the outcome of a race are placed with, or in, a wagering pool conducted by a person licensed or otherwise permitted to do so under state law, and in which the participants are wagering with each other and not against the operator." Subsection (10) defines "pool" as "the total sum of all moneys wagered in each race for each type of bet."
Why the constitutional question is hard. Read literally, the statutory definition supports the racing industry's pari-mutuel framing of instant racing: many wagers go into a pool, players are nominally wagering with each other, and the operator nominally takes a fixed cut. Read in light of Oneida County and the broader caselaw, the picture changes: the constitutional concept of pari-mutuel betting depends on competitive pool participation around a single race, which instant racing does not produce.
The Severability tension. Initiatives in Idaho, once enacted, become statutes that can be amended or repealed by the legislature or by another initiative. The legislature cannot constitutionally agree to be bound by the policy preferences of an earlier initiative. So a clause directing the legislature to "take all available steps" to revive struck-down provisions has no legal teeth.
Citations
Statutes and constitutional provisions:
- Idaho Constitution art. III, § 20 (gambling prohibition with pari-mutuel exception)
- Idaho Code § 34-1809 (Certificate of Review requirement)
- Idaho Code § 54-2502 (Idaho Racing Act definitions)
- Idaho Code § 54-2512A (repealed 2015; the section the initiative would have re-enacted)
- Idaho Code § 54-2514 (simulcast facility licensing)
- Idaho Code § 67-429B (parallel restrictions)
- 2016 Idaho Sess. Laws 3 (formal repeal codification)
Cases:
- Coeur d'Alene Tribe v. Denney, 161 Idaho 508, 387 P.3d 761 (2015) (untimely gubernatorial veto of 2015 repeal)
- Oneida County Fair Bd. v. Smylie, 86 Idaho 341, 386 P.2d 374 (1963) (foundational pari-mutuel decision)
- Pearl v. Bd. of Prof'l Discipline, 137 Idaho 107, 44 P.3d 1162 (2002) (statutory construction)
- Wyo. Downs Rodeo Events, LLC v. State, 134 P.3d 1223 (Wyo. 2006) (instant racing is not pari-mutuel under Wyoming law)
- People v. Monroe, 182 N.E. 439 (Ill. 1932) (early pari-mutuel analysis)
- Rohan v. Detroit Racing Ass'n, 22 N.W.2d 433 (Mich. 1946) (definitional)
- State ex rel. Moore v. Bissing, 283 P.2d 418 (Kan. 1955) (cited in Oneida County dissent)
- Johnson v. Diefendorf, 56 Idaho 620, 57 P.2d 1068 (1936) (one legislature cannot bind future ones)
- Gibbons v. Cenarrusa, 140 Idaho 316, 92 P.3d 1063 (2002) (initiative laws are amendable like any other)
Out-of-state AG opinions:
- Neb. Op. Att'y Gen. No. 10009, 2010 WL 1251447 (Mar. 29, 2010)
- Ariz. Att'y Gen. Op. No. 114-008 (Dec. 30, 2014)
- Ky. Op. Att'y Gen. No. 10-001, 2010 WL 81969 (Jan. 5, 2010)
- 94 Md. Op. Att'y Gen. 32, 2009 WL 998670 (Mar. 17, 2009)
Secondary authority:
- Bennett Liebman, Pari-Mutuels: What Do They Mean and What Is at Stake in the 21st Century?, 27 Marq. Sports L. Rev. 45 (2016)
Source
- Landing page: https://www.ag.idaho.gov/office-resources/opinions/
- Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C011218.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.
STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
January 12, 2018
The Honorable Lawerence Denney
Idaho Secretary of State
Statehouse
VIA HAND DELIVERY
RE: Certificate of Review
Proposed Initiative Amending Title 54, Chapter 25 Idaho Code, to Authorize
Historical Horse Racing as a Form of Pari-Mutuel Betting
Dear Secretary of State Denney:
An initiative petition was filed on January 3, 2018 proposing to amend title 54,
chapter 25 of the Idaho Code through the addition of the Save the Horse Racing in Idaho
Act ("Act"). Pursuant to Idaho Code § 34-1809, this office has reviewed the petition and
prepared the following advisory comments. Given the strict statutory timeframe within
which this office must review the petition, our review can only isolate areas of concern
and cannot provide in-depth analysis of each issue that may present problems. Further,
under the review statute, the Attorney General's recommendations are "advisory only."
The petitioners are free to "accept them in whole or in part." This office offers no opinion
with regard to the policy issues raised by the proposed initiative or the potential revenue
impact to the state budget from likely litigation over the initiative's validity.
BALLOT TITLE
Following the filing of the proposed initiative, this office will prepare short and long
ballot titles. The ballot titles should impartially and succinctly state the purpose of the
measure without being argumentative and without creating prejudice for or against the
measure. While our office prepares titles for the initiative, petitioners may submit
proposed titles for consideration. Any proposed titles should be consistent with the
standard set forth above.
P.O. Box 83720, Boise, Idaho 83720-0010
Telephone: (208) 334-2400, FAX: (208) 854-8071
Located at 700 W. Jefferson Street, Suite 210
Secretary of State Denney
January 12, 2018
Page 2 of 8
MATTER OF FORM
Sections 1 and 2 of the proposed initiative contain, respectively, the law's title and
its findings and purposes. As this office understands these sections, they will not be
codified in the Idaho Code. Section 3 is in proper legislative format for showing new
statutory provisions.
SUMMARY OF INITIATIVE AND MATTERS OF SUBSTANTIVE IMPORT
I. Summary of Proposed Initiative
The proposed initiative adds three sections to title 54, chapter 25, Idaho Code that
authorize wagering through the use of "historical horse race terminals." The first section,
to be codified as Idaho Code § 54-2512A, derives in part from the similarly-numbered
provision repealed in 2015. 2016 Idaho Sess. Laws 3. The Idaho Supreme Court found
the Governor's veto of the repealing legislation untimely and therefore ineffective. Coeur
d'Alene Tribe v. Denney, 161 Idaho 508, 387 P.3d 761 (2015). The other two sections,
to be codified as Idaho Code §§ 54-2512B and 54-2512C, have no counterparts in the
repealed legislation.
A. Section 54-2512A. The proposed initiative makes three significant
changes to the repealed provision.
-
Subsection (1) authorizes the operation of historical horse race terminals at
facilities where (a) live and/or simulcast horse racing is conducted and where live horse
racing occurs at least eight days per year or (b) where the simulcast facility is subject to
Idaho Code § 54-2514(A)(1). The repealed § 54-2512A(1) deemed historical horse race
wagering "within the scope of a license that authorizes a live race meet licensee to
conduct and supervise the use of the pari-mutuel wagering simulcast and/or televised
races" and further authorized such wagering "at any facility authorized to conduct and
supervise to conduct and supervise wagering on simulcast and/or televised races." This
change presumably alters the scope of facilities where historical horse race wagering will
be permissible from that of the repealed provision. E.g., Pearl v. Bd. of Prof'l Discipline,
137 Idaho 107, 113-14, 44 P.3d 1162, 1168-69 (2002). The precise effect on the number
of potentially authorized facilities, however, is unclear. -
Subsections (2) and (3) are new and largely replicate Idaho Code § 67-
429B. Subsection (2) identifies the only functions that historical horse race video
terminals may perform. Subsection (3) declares the terminals are neither slot machines
nor electronic or electromechanical imitation or simulation of casino gambling. -
Subsection (4) deals with the allocation of daily receipts generated by
historical horse race wagering. It increases the amount reserved for distribution to
winning wagers from 89 percent to 90 percent; reduces the amount reserved to the
Secretary of State Denney
January 12, 2018
Page 3 of 8
Commission for specified public uses from 1.5 percent to 1.0 percent; and increases the
amount paid to the licensee from 9.5 percent to 10 percent.
- As under the repealed law, subsection (5) requires licensees to enter into
an agreement with a horsemen's group, as defined in Idaho Code § 54-2502(4),
establishing "the percentage of the historical horse race handle that is dedicated to the
live horse race purse structure" and that must be paid into the "historical horse race purse
moneys fund" created under subsection (6). Subsection (7) grants rule-making authority
to the Idaho Racing Commission ("Commission") to implement the section's provisions.
B. Section 54-2512B. This section provides that the Act becomes effective
upon voter approval and completion of the canvass by the Board of Canvassers. It
expressly states that no further executive or legislative action is required for the Act's
implementation.
C. Section 54-2512C. This section is titled "Severability" and includes
standard statutory severability language; i.e., judicial invalidation of any term or provision
in the Act that does not affect the validity or enforceability of the remaining provisions.
However, it further states: "It is intent of the voters, that, to the extent any term or provision
is declared to be illegal, void, or unenforceable, the legislature shall take all available
steps to enact such term or provision in a legal, valid, and enforceable manner, whether
through a statute or a proposed constitutional amendment to restore live horse racing in
Idaho through the authorization of pari-mutuel wagering on historical horse races using
video terminals."
Finally, the 2015 repeal of Idaho Code § 54-2512A left untouched the definition of
"historical horse race" in Idaho Code § 54-2502(3). It provides: "Historical horse race'
means a race involving live horses that was conducted in the past and that is rebroadcast
by electronic means and shown on a delayed or replayed basis for the purposes of
wagering conducted at a facility that is authorized to show simulcast and/or televised
races." A potential conflict between the definition and section 54-2512A(1) therefore
exists that the proposed initiative sponsors may wish to address.
II. Substantive Analysis
A. The Status of Historical Horse Race Wagering as Pari-Mutuel Betting
Art. III, sec. 20 of the Idaho Constitution, as presently configured, generally
prohibits gambling. However, it excepts three forms of gaming if conducted in conformity
with enabling legislation: a state lottery, pari-mutuel betting, and bingo or raffle games
"operated by qualified charitable organizations in pursuit of charitable purposes." This
provision does not define the term "pari-mutuel." As explained in greater detail below, the
status of historical horse racing as legally permissible pari-mutuel betting under art. III,
sec. 20 is uncertain and likely to draw a legal challenge.
Secretary of State Denney
January 12, 2018
Page 4 of 8
- Pari-mutuel betting has a lengthy history in Idaho.
At the time of the 1992 amendments to the constitutional provision, there was
nonetheless a general understanding of pari-mutuel wagering established with reference
to live horse racing as a result of the decision in Oneida County Fair Bd. v. Smylie, 86
Idaho 341, 386 P.2d 374 (1963) ("Oneida County"). There, the Supreme Court issued a
writ of mandate compelling the Governor to appoint members to the Idaho Racing
Committee created under the Idaho Horse Racing Act adopted in 1963. 1963 Idaho Sess.
Laws 246. The majority opinion rejected the contention that the new statute's
authorization of pari-mutuel betting violated art. III, sec. 20 of the Idaho Constitution. That
provision, as then constituted, prohibited "any lottery or gift enterprise under any pretense
of for any purpose whatever." The statute itself did not define "pari-mutuel," but the Court
accepted the petitioners' description:
The pari mutuel system is a term of art for the mathematical method by
which the amounts to be paid to successful patrons are computed. All
money paid into the system is paid out to the patrons except for a small
percentage retained by the state and fair board pursuant to the act. Odds
on a particular horse are determined only by the amount of money paid on
such horse by patrons in comparison to other horses in the race.
86 Idaho at 345, 386 P.2d at 376. The majority opinion reviewed at length decisions from
other states addressing the question whether pari-mutuel wagering on horse races
embodied a constitutionally-proscribed lottery and, adopting the majority view, held that
"the pari-mutuel system of wagering on horse racing meets, as provided [under the new
statute], is not one solely based on chance, which constitutes an essential requisite of a
lottery." Id. at 368, 386 P.2d at 391.
Several of the decisions reviewed in Oneida County commented on the nature of
pari-mutuel betting. See 86 Idaho at 352, 386 P.2d at 380-81 ("The pari-mutuel system
of betting does not come within the definitions given above. While the amount of money
to be divided is indefinite as to dollars and cents, it is definite in that the amount of money
to be divided is the total stakes on the winning horse, less a given percentage to the
management. The persons among whom the money is to be divided are not uncertain,
as they are those who bet on the winning horse.'") (quoting People v. Monroe, 182 N.E.
439, 442 (Ill. 1932) (internal quotation marks omitted); id. at 356, 386 P.2d at 383 ("Said
dictionary defines pari-mutuel as a form of betting on horses in which those who bet on
the winning horse share the total stakes, less a small per cent to the management. It
describes a pari-mutuel machine as a machine for registering and indicating the number
and nature of bets made on horse races, used in the pari-mutuel system of betting.'")
(quoting Rohan v. Detroit Racing Ass'n, 22 N.W.2d 433, 438 (Mich. 1946) (internal
quotation marks omitted). A key feature to pari-mutuel gambling is thus the existence of
odds as determined by the wagers placed on horses in a particular race or series of races
that, collectively, are the "pool" to be shared by successful bettors. Id. at 371-72, 386
P.2d at 394 (Taylor, J., dissenting) ("[u]nder this system the exact "odds" on a particular
Secretary of State Denney
January 12, 2018
Page 5 of 8
dog to "win, place or show' cannot be determined until the betting is closed and
information regarding the number and amount of bets is tabulated by the pari-mutuel
machine, which, in the last analysis, is simply a device for calculating the odds'") (quoting
State ex rel. Moore v. Bissing, 283 P.2d 418, 423 (Kan. 1955)). In sum, a necessary
element of pari-mutuel wagering, as traditionally understood, is the competition between
pool participants with respect to the same race or group of races, whose differing views
of likely outcomes give rise to the odds that determine eventual pool payouts. See
generally Bennett Liebman, Pari-Mutuels: What Do They Mean and What Is at Stake in
the 21st Century?, 27 Marq. Sports L. Rev. 45, 100-01 (2016) (identifying the "six core
elements or attributes" of a pari-mutuel system as including, inter alia, "players wager[ing]
against each other in the pool" with "[t]he actual return to the winning bettors . . . not
known until after wagering on the pool has closed').
This traditional understanding of pari-mutuel wagering appears to be incorporated
in the section 54-2502(8) definition of that term: "'Pari-mutuel' means any system
whereby wagers with respect to the outcome of a race are placed with, or in, a wagering
pool conducted by a person licensed or otherwise permitted to do so under state law, and
in which the participants are wagering with each other and not against the operator."
(Emphasis added.) The term "pool" is further defined as "the total sum of all moneys
wagered in each race for each type of bet. Types of bets include win, place, show,
quinella, daily double, exacta, trifecta, etc., and such other types as are approved by the
commission from time to time." Id. Idaho Code § 54-2502(10) (emphasis added).
The proposed initiative does not define the nature of historical horse race wagering
pools or whether pool participants compete against one another with respect to the
outcome of the same race or series of races. It is also silent on whether any odds exist
upon which pool distributions can be calculated. It is similarly silent on whether the
entirety of a wager is placed into the pool from which the payouts will be made; i.e.,
whether bettors or the "house" is responsible for ensuring that a sufficient corpus exists
in the pool to make the required payouts.
- Equating historical horse racing wagering to pari-mutuel betting may be
legally vulnerable.
The operational nature of historical horse race gambling in other states, though,
has been examined, and it appears probable that the same type of video terminals will be
used if the proposed initiative is approved. The Nebraska Attorney General has explained
succinctly how historical horse racing, also known as "instant racing," wagering functions:
The wagering on "historic horseraces" which would be authorized
under LB 1102 thus appears to refer to the patented wagering system
known as "Instant Racing." "Instant Racing" was developed as a joint
venture between Amtote International and RaceTech, LLC. The "Instant
Racing" system allows bettors to wager on the results of previously run or
"historic" races through electronic "Instant Racing Terminals" ["IRTs"]. The
Secretary of State Denney
January 12, 2018
Page 6 of 8
machines reportedly can access over 200,000 historic races. Wagers are
made by coin or currency. Players can utilize limited Daily Racing Form
past performance data (i.e. winning percentages, average earnings per
start, trainer and jockey success, etc.) provided in graphic form before
making their selections. The data is provided in such a way that bettors
cannot identify the exact race. The machines contain a video screen which
allows bettors to view the entire race after placing their wagers, or only a
short clip of the stretch run of the race.
Wagering generally is limited to selections involving the order of
finish of the first three horses, such as selecting the first three finishers in
order, the top two finishers, or the winner and any two of the top three
finishers. Variations on such wagering are provided for under the
Association of Racing Commissioners International Model Rules for Instant
Racing. RaceTech promotes the product as a true parimutuel wagering
system. The machines are connected to the same wagering pool and
wagers are processed through a central totalisator. Unlike most parimutuel
wagering, where many wagers are made on a single race, Instant Racing
involves wagers on many different races. Winners receive graduated
payoffs based on their correct selection of the order of finish. Payoffs are
also determined by timing—the bettor who hits first receives the highest
payoff.
Neb. Op. Att'y Gen. No. 10009, 2010 WL 1251447, at 1-2 (Mar. 29, 2010); see also Ariz.
Att'y Gen. Op. No. 114-008, at 2 (Dec. 30, 2014) (describing operation of RaceTech, LLC,
Instant Racing terminals); Ky. Op. Att'y Gen. No. 10-001, 2010 WL 81969, at 1-2 (Jan. 5,
2010) (same); 94 Md. Op. Att'y Gen. 32, 2009 WL 998670, at 1-2 (Mar. 17, 2009) (same).
Whether "instant racing" wagering falls within the ordinary understanding of pari-mutuel
betting presents a significant issue. The Wyoming Supreme Court has held that it does
not. Wyo. Downs Rodeo Events, LLC v. State, 134 P.3d 1223, 1230 (Wyo. 2006) ("We
agree with the district court's tacit conclusion that we are not dealing with a new
technology here, we are dealing with a slot machine that attempts to mimic traditional
pari-mutuel wagering. Although it may be a good try, we are not so easily beguiled.").
More recently, two state attorneys general have issued opinions explaining why
they had grave doubts over the pari-mutuel status of instant racing wagering. The
Nebraska Attorney General stated:
[While the Instant Racing system is promoted as a parimutuel wagering
system, there is a question as to whether the manner in which "Instant
Racing" would be conducted is truly "parimutuel" wagering. It may be true
that "Instant Racing" can be said to involve parimutuel wagering in a broad
sense, since there is a pooling of wagers and a distribution of amounts
wagered to winners. There appears, however, to be a distinction between
parimutuel wagering on traditional live and simulcast races, and Instant
Secretary of State Denney
January 12, 2018
Page 7 of 8
Racing. Unlike most parimutuel wagering on live and simulcast races,
where many wagers are made on a single race or series of races, Instant
Racing involves wagers on many different races. The pools also do not
pertain to specific races. It is not clear that wagering on historic horseraces
through IRTs is truly "parimutuel" in nature.
Neb. Op. Att'y Gen. No. 10009, 2010 WL 1251447, at 9 (footnote omitted). The Maryland
Attorney General expressed similar concerns:
In traditional pari-mutuel wagering, those who successfully bet on the
same winning outcome share a betting pool. . . . This is not the case with
Instant Racing. There, individual players — even those using machines in
the same location — are each wagering on different races with different
horses and different outcomes. A bettor who successfully chooses a
winning horse can therefore never "share the mutuel pool" with another who
has done the same, for the simple reason that no one else is betting on the
same race. In traditional pari-mutuel wagering, only the same type of bets
on the same race or series of races are pooled together. By contrast, with
Instant Racing, wagers on completely different races are pooled together
based only on the various types of "wins" available to the players. Instead
of each betting pool being shared by all of those who selected the correct
order of finish in a particular race, the Instant Racing winner takes all of the
money that has accumulated in the applicable betting pool at the time of
that person's successful bet. This may be pooled betting, but it is not pari-
mutuel betting as contemplated in the Maryland Horse Racing Act.
Furthermore, bettors in a traditional pari-mutuel system, through their
differing opinions and the money wagered on such opinions, participate
directly in setting the odds on the various possible outcomes of a given race.
Typically, the bettors are the only determinant of what the odds will be. For
obvious reasons, this cannot occur in Instant Racing because, as noted
above, no two players are ever betting on the same race. To the extent the
success or failure of other players, or other factors such as the timing of
"wins," may influence the size of payouts available in Instant Racing, it does
not occur through the same process which is at work in traditional pari-
mutuel wagering. Indeed, from the materials provided, it is not always
possible to determine what precise method, formula or procedure Race
Tech will use to arrive at an appropriate payout in any given situation. What
is clear, however, is that the method used is fundamentally different.
94 Md. Op. Att'y Gen. 32, 2009 WL 998670, at 4-5 (citation omitted). The Maryland
opinion also pointed to a unique aspect of instant racing—seed pools—that are composed
of a portion of all wagers to ensure that sufficient funds exist to pay successful players.
Id. at 2 (explaining the creation and use of seed pools); 5 ("Instant Racing eliminates the
potential for a minus pool by utilizing the seed pool, which is made up of monies wagered
Secretary of State Denney
January 12, 2018
Page 8 of 8
by the bettors, as opposed to money supplied by the race track owner."). Such deductions
are foreign to traditional pari-mutuel wagering.
- Absent a constitutional amendment, litigation likely appears the only means
for resolving these issues under Idaho law.
There are, in sum, significant questions over whether the historical horse race
wagering authorized under the proposed initiative—if similar to the instant racing betting
analyzed in these attorney general opinions—constitutes pari-mutuel betting. See
generally, Liebman, 27 Marq. Sports L. Rev. at 109-10 (concluding that instant racing
wagering does not comport with traditional pari-mutuel betting). This office offers no
recommendation concerning whether the proposed initiative's sponsors should consider
pursuing an amendment to art. III, sec. 20 of the Idaho Constitution, but it does appear
quite possible that the initiative's adoption will result in litigation over whether historical
horse race wagering, if conducted on instant racing video terminals comparable to those
discussed above, is pari-mutuel gambling exempted under the constitutional provision.
B. The Severability Section's Directive to Future Legislatures
The Idaho Supreme Court established long ago that "[a] legislative session is not
competent to deprive future sessions of powers conferred on them, or reserved to them,
by the constitution." Johnson v. Diefendorf, 56 Idaho 620, 636, 57 P.2d 1068, 1075
(1936). So, too, it is settled that "once a law is enacted in the initiative process it is like
any other law. It may be amended or repealed by the legislature or subsequent initiative."
Gibbons v. Cenarrusa, 140 Idaho 316, 320, 92 P.3d 1063, 1067 (2002). These principles,
taken together, render the second sentence of the proposed Idaho Code § 54-2512C
hortatory and of no binding effect.
CERTIFICATION
I HEREBY CERTIFY that the enclosed measure has been reviewed for form, style,
and matters of substantive import. The recommendations set forth above have been
communicated to the Petitioner via copy of this Certificate of Review, deposited in the
U.S. Mail to Benn Brocksome, 420 W. Main St., Ste. 205, Boise, Idaho 83702.
Sincerely,
LAWRENCE G. WASDEN
Attorney General
Analysis by:
Clay R. Smith
Deputy Attorney General