Delaware Park

National Labor Relations Board - Board Decisions

Nov 8, 1997

325 N.L.R.B. 156 (N.L.R.B. 1997)

156
325 NLRB No. 12
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 General Teamsters Local Union, No. 326, a/w International
Brotherhood of Teamsters, AFL–CIO, intervened on the first day of
the trial, solely for the purpose of being placed on the ballot should
an election be directed. The Intervenor played no other role in this
proceeding.
2 Pursuant to Sec. 103.3 of its Rules and Regulations, the Board
has declined to assert jurisdiction in proceedings involving the horse-
racing industry.
3 324 NLRB No. 91 (Sept. 30, 1997).
4 Although the casino operation generates only 62 percent of the
Employer’s income as compared to 98 percent in Prairie Meadows,
we conclude that this difference does not alter the view that the ca-
sino is not an adjunct of the racing enterprise. In addition, we note
that the unit in this case comprises employees engaged exclusively
in the casino gaming operation, a factor that further supports our as-
sertion of jurisdiction.
5 The relevant portions of the Regional Director’s decision are at-
tached.
Inasmuch as the Employer is not covered by Sec. 103.3, we do
not reach the issues resolved by our concurring colleague. That is
an issue for another proceeding, not this one.
1 Chairman Miller and Members Jenkins, Kennedy, and Penello;
Member Fanning dissenting.
2 See Chairman Fanning’s point-by-point attack on Sec. 103.3 of
the Board’s Rules as set forth in his concurring opinion in Elliot
Burch, 230 NLRB 1161, 1162 (1977).
3 See El Dorado Club, 151 NLRB 579 (1965); The Anthony Co.,
220 NLRB 886 fn. 5 (1975), enfd. 95 LRRM 3239 (9th Cir. 1977);
and Grand Resorts, 221 NLRB 539 (1975).
Delaware Racing Association d/b/a Delaware Park
and United Food & Commercial Workers
Union, Local 27, AFL–CIO, Petitioner. Case
20–RC–17237
November 8, 1997
DECISION ON REVIEW AND ORDER
BY CHAIRMAN GOULD AND MEMBERS FOX AND
HIGGINS
This proceeding presents the issue of whether the
National Labor Relations Board should assert jurisdic-
tion over a slot machine enterprise conducted by a
racetrack. The Petitioner, United Food and Commercial
Workers, Local 27, AFL–CIO,1 seeks to represent a
unit of employees who perform duties exclusively re-
lated to the casino aspect of Employer Delaware Park’s
business. Though the Employer and the Union stipu-
lated to an appropriate unit, a hearing was conducted
because the Employer contended that the Board should
decline jurisdiction because of the Employer’s involve-
ment in the horseracing industry.2
Following the hearing, the Regional Director found
that the arrival of gaming machines had led to changes
in Delaware Park’s work force and revenue stream.
These changes had resulted in a business more akin to
a casino than to a racetrack. Accordingly, he concluded
that the slot machine operation did not ‘‘involve’’ the
horseracing industry, and he directed an election. The
Employer requested review of the Regional Director’s
decision and a stay of the election. We granted review,
but declined to stay the election. The election was held
on May 5, 1997, and the ballots were impounded. We
have reviewed the record in the light of the Petitioner’s
and the Employer’s briefs.
The facts here closely parallel those in Prairie
Meadows Racetrack & Casino,3 our recently issued de-
cision involving another racetrack that received sub-
stantial income from slot machines. In each case, the
new slot machine operation caused the work force to
increase substantially and to change in character from
seasonal to year round. In Prairie Meadows, we deter-
mined that if the employees’ job functions in the units
sought related predominantly to the casino enterprise
and there was no significant functional integration be-
tween the casino and horseracing operations, then the
casino operation did not involve the horseracing indus-
try. We concluded that this finding was warranted even
though the casino workers were employed by the race-
track. In addition, we concluded that, to the extent that
economic factors are relevant, the facts showed that
the racetrack was dependent upon the casino, not the
other way around. Thus, the casino is not an adjunct
of the racing operation.4 That analysis governs this
proceeding. Accordingly, we affirm the Regional Di-
rector’s decision.5
ORDER
The Regional Director is directed to open and count
the ballots cast by the employees in the election, and
to take further appropriate action.
CHAIRMAN GOULD, concurring.
When the Board adopted Section 103.3 in 1973,1 the
stated reasons for this rule made no sense2 and provide
even less support almost a quarter century later. The
two primary reasons cited for the rule were (1) the
States have extensive control over the horseracing in-
dustry and (2) the sporadic nature of employment in
the horseracing industry encourages temporary part-
time workers, much turnover, and an unstable work
force. As shown below, neither reason has merit here.
First, as astutely observed by the Regional Director,
state regulation of casinos, jai alai facilities, and other
types of gambling establishments has not foreclosed
the Board’s jurisdiction over those entities.3 Likewise,
similar state regulation of the horseracing industry
should pose no problem. In this connection, there is no
evidence suggesting that the Board’s processes would
be severely jeopardized if the Board were to start as-
serting jurisdiction over the horseracing industry.
Second, the Board’s earlier fears about asserting ju-
risdiction over an industry with ‘‘a sporadic and unsta-
ble workforce’’ have simply not materialized. The
Board has not encountered the serious administrative
problems predicted by Section 103.3 when dealing
with other industries where employees have chosen
various kinds of flexible working arrangements and
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157DELAWARE PARK
4 For example, Ladbroke Group PLC, a British company, owns the
Detroit Race Course. Another example is Patriot American Hospi-
tality which ‘‘obtained a favorable tax structure when it purchased
Bay Meadows Operating Company and the California Jockey Club
last year’’ and ‘‘increased its holdings with the acquisition of a hotel
chain and a casino resort in Puerto Rico.’’ See The Blood-Horse,
October 11, 1997, p. 5396.
5 See The Blood-Horse, October 11, 1997, p. 5396.
1 The parties stipulated at the hearing that the correct name of the
Employer is Delaware Racing Association.
2 The Intervenor did not participate in the hearing but moved to
intervene only for the purpose of being included on the ballot in
whatever unit the Regional Director determines is appropriate and
directs an election. The Employer had no objection to the motion to
intervene so long as the Intervenor sought representation of the same
unit of employees sought by the Petitioner. The Petitioner did not
object to the motion to intervene, but did reserve its right to file ap-
propriate internal dispute adjustment procedures within the AFL–
CIO. The hearing officer granted the motion to intervene.
3 The Horse Racing Redevelopment Act amended various sections
of Chapter 48, Title 29, and certain Chapters of Titles 3 and 28, of
the Delaware Code.
4 29 Del. C. § 4819(a).
5 During the same time period, the Employer accumulated approxi-
mately $25. 8 million in parimutuel revenue and approximately $8.9
Continued
schedules. In any event, the record in this case shows
that the Employer strives to hire permanent, full-time
employees for its year-round casino operations.
In fact, there is substantial evidence that today em-
ployment at many, if not most, racetracks is not ‘‘spo-
radic or unstable.’’ Many tracks schedule races 5 or 6
days a week year round or with short breaks between
meets. For example, the racing schedule published in
The Blood-Horse, October 11, 1997, page 5515, indi-
cates that the following tracks operate January 1
through December 31: El Comandante, Mountaineer
Park, Penn National, and Philadelphia Park. Some
tracks schedule racing throughout the year with brief
breaks between meets, while others remain open
throughout the year except for winter breaks. It seems
quite likely that these employers are hiring a large pro-
portion of their work force on a year-round basis.
Horseracing is no longer, if it ever was, a local busi-
ness. Many tracks are owned and operated by multi-
national corporations operating racetracks, simul-
casting, casinos, and hotels nationwide in the United
States and in other countries as well.4 At a recent 18-
day meet, Fairplex Park’s intrastate wagering amount-
ed to $46,715,775. It also engaged in out-of-state
simulcasting.5 A minimum of research would produce,
I am sure, many other examples of the huge economic
impact of the horseracing industry. There can be no
question but that a labor dispute in this industry will
have a substantial impact on commerce.
In sum, the horseracing industry is an industry with
a major impact on commerce. Until Section 103.3 of
the Board’s Rules is revoked the many employees
working in this industry will continue to be denied the
protection of the National Labor Relations Act. I urge
the immediate revocation of this rule.
APPENDIX
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the Na-
tional Labor Relations Act (the Act), as amended, a hearing1
was held before a hearing officer of the National labor Rela-
tions Board (the Board).
Pursuant to the provisions of Section 3(b) of the Act, the
Board has delegated its authority in this proceeding to me.
Upon the entire record in this proceeding, the undersigned
finds:
1. The hearing officer’s rulings made at the hearing are
free from prejudicial error and are hereby affirmed.
2. The parties stipulated that United Food and Commercial
Workers Union, Local 27, AFL–CIO (the Petitioner) and
General Teamsters Local Union No. 326, a/w International
Brotherhood of Teamsters, AFL–CIO (the Intervenor),2 are
each labor organizations within the meaning of the Act.
3. The parties stipulated that the Employer is a Delaware
corporation engaged in operating and maintaining a business
operation known as Delaware Park. The parties further stipu-
lated that during the calendar year ending December 31,
1996, the Employer derived gross revenues in excess of
$500,000 from those business operations and purchased and
received goods and materials and services valued in excess
of $50,000 from points located outside the State of Delaware.
Based on the parties’ stipulations to such facts and for the
reasons discussed below, I have concluded that the Employer
is engaged in commerce and that it will effectuate the pur-
poses of the Act to assert jurisdiction herein.
Delaware Park opened in about the mid-1930s and, with
the exception of a couple of years in the early 1980s, it has
operated continuously as a thoroughbred horseracing track. In
the early 1980s, Delaware Park was purchased by William
Rickman, Sr., who currently is the controlling stockholder
and chairman of the board of the Employer. The parties
agree that by at least the early 1990s, Delaware Park and
other horse racetracks in the State of Delaware faced finan-
cial hardship because they had difficulty competing with
racetracks in other States that could offer larger purses and
could attract better quality horses. In 1994, in response to the
depressed state of the horseracing industry in Delaware, the
Delaware General Assembly adopted the Horse Racing Rede-
velopment Act3 which authorized a video lottery in the State
of Delaware. The video lottery machines are similar to slot
machines found in casinos in Atlantic City or Las Vegas, but
under the Delaware law, they are restricted to ‘‘the confines
of an existing racetrack property . . . on which was con-
ducted in 1993 either a horse racing meet . . . or a harness
horse racing meet.’’4
In the last few days of December 1995, the Employer
began operating video lottery terminals (VLTs) at Delaware
Park. The VLT operation and the limitations placed on the
operation by the State of Delaware are discussed in more de-
tail below. In sum, however, the Employer’s introduction of
the VLTs was very successful and accounted for approxi-
mately $56.8 million in revenue in 1996.5 The Petitioner
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158 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
million in revenue from other sources (such as food and beverage
services).
6 The parties stipulated that the following would be an appropriate
unit of employees if I were to direct an election:
All full time and regular part time video lottery operations
and/or slot machine employees employed by Delaware Racing
Association at its campus in Wilmington, Delaware, including
lead technicians, slot technicians, floor attendants, dispatch
clerks, booth supervisors, cage and coin cashiers, booth cashiers,
change attendants, impress clerks, satellite cashiers, wrappers,
main bank cashiers, hard count clerks, soft count clerks, and ex-
cluding all other employees which include shift supervisors, area
supervisors, vice presidents, key employees, directors and man-
agers of Delaware Park, the executive director, executive direc-
tor of slots or VLT, director of slots or VLT, technical man-
agers, shift managers, property controllers, assistant property
controllers, income audit managers, income audit clerks, slot
cashiering managers, cashier shift managers, assistant slot cash-
iering managers, assistant cashier shift managers, hard count su-
pervisors, assistant hard count supervisors, soft count super-
visors, assistant soft count supervisors, all track money room
employees, all food and beverage employees, all food and bev-
erage revenue and accounting employees, all office clerical em-
ployees, all parimutuel clerks, all parimutuel supervisors, all
stewards, valets, grooms, starting gate and other live racing per-
sonnel, all simulcast racing employees, all security and surveil-
lance employees, all other employees, guards, and supervisors as
defined in the Act.
7 Br. at p. 15 citing the Advice Memorandum in The Downs at Le-
high Valley, 4–CA–22934 (Nov. 22, 1994), 1994 GCM LEXIS 65.
8 29 Del. C. § 4801(g). The Employer’s chief operating officer tes-
tified that the appearance of the machines and the gambling experi-
ence using the VLTs is the same as at casinos in Atlantic City.
There is a VLT version of Keno and VLTs that have card games
including blackjack and royal flush poker. The VLTs at the Employ-
er’s facility can be played for 25 cents, 50 cents, $1, $2, or $5. A
patron wins based on probability; the probability is set on a com-
puter chip that operates the VLT. If a person wins, the machine (or,
if necessary, an attendant) pays the person or gives them credits on
the machine.
9 29 Del. C. § 4805(b)(13).
10 29 Del. C. § 4820(b).
11 29 Del. C. § 4820(a). The employees who are the subject of the
instant representation petition are clearly employees of Delaware
Park and are not employees of the State of Delaware. Indeed, no
party has contended otherwise.
12 29 Del. C. § 4819(c). The VLTs may not be operated on Christ-
mas Day or on Easter.
13 29 Del. C. § 10148(1).
14 29 Del. C. § 4815(b)(1).
filed the instant petition to represent the employees employed
in the Employer’s VLT operation.6
The Employer contends that the petition in the instant mat-
ter should be dismissed because, pursuant to Section 103.3
of the Board’s Rules and Regulations, ‘‘the Board will not
assert its jurisdiction in any proceeding under Sections 8, 9,
and 10 of the Act involving the horseracing [sic] and dograc-
ing [sic] industries.’’ 29 C.F.R. § 103.3. In support of its po-
sition, the Employer points to Board precedent and to the
Advice Memorandum issued by the Office of the Board’s
General Counsel in The Downs at Lehigh Valley, Case 4–
CA–22934 (Nov. 22, 1994), wherein the Board’s General
Counsel refused to issue a complaint against an employer op-
erating an off-track betting parlor and restaurant on the basis
that ‘‘the employer is an integral part of the horseracing [sic]
industry over which the Board, under NLRB Rules and Reg-
ulations Section 103.3, will not assert its jurisdiction.’’7 The
Employer strongly argues that its VLT operation is an inte-
gral part of its horseracing operations and that the Board
therefore will not assert jurisdiction.
The Petitioner, on the other hand, argues that the Employ-
er’s VLT employees do the same work as casino employees
and that the Board has asserted jurisdiction over employers
operating casinos. Moreover, the Petitioner asserts that be-
cause the Employer’s VLT operations account for such a sig-
nificant portion of its revenues, the essential business of the
Employer has changed and that it is now ‘‘a gaming casino
that incidentally also operates a horse book.’’ For these rea-
sons, the Petitioner strongly urges that I find and assert juris-
diction over the Employer because Section 103.3 of the
Rules and Regulations are inapplicable in the instant case.
For the following reasons, I find that the Board does have
jurisdiction over the Employer and that it will effectuate the
purposes of the Act to assert jurisdiction in this case.
The Facts
State Regulation
A VLT is a machine in which bills, coins or tokens are
deposited in order to play a game of chance in which the re-
sults are randomly and immediately determined by the ma-
chine. The machine may use spinning reels or video displays
or both, and may dispense coins or tokens directly to win-
ning payers.8 In Delaware, the only entities that may be li-
censed as ‘‘video lottery agents’’ are persons or corporations
which, in 1993, held either a licensed horseracing meet or a
licensed harness horseracing meet.9 Delaware Park is the
only entity that qualifies as a video lottery agent in New
Castle County, Delaware. Two other horse racetracks in
Delaware qualify because they conducted a harness meet in
1993. By law, no more than 1000 VLTs may be located
within the confines of a particular racetrack property. The
number and type of machines are subject to review by the
Director of the State Lottery Office.10 All VLTs are either
owned by the State or are leased by the State from a licensed
manufacturer; the horse racetrack cannot own or lease the
VLTs.11
All the VLTs are required to be connected to the State
Lottery’s central computer system and the State Lottery has
the ability to turn the VLTs on and off. By law, the VLTs
can be operated 363 days a year, Monday through Saturday
from 8 to 2 a.m., and on Sunday from 1 p.m. to 2 a.m.12
Using a central computer system, the State Lottery turns on
the VLTs located at the Employer’s facility at 8 a.m. Mon-
day through Saturday and at 1 p.m. on Sunday and the State
Lottery turns them off everyday at 2 a.m.
In order to maintain a license as a video lottery agent, the
Employer must (1) conduct live horseracing operations on at
least 100 days per year and (2) employ during the live horse-
racing operations a minimum of one hundred additional em-
ployees than the average daily number employed during the
1993 racing meet.13 By law, on an average basis, at least 87
percent of the total proceeds received from the VLT oper-
ation must be returned to the players of the machines.14 All
proceeds, net of proceeds returned to players, are transferred
into the State Lottery Fund. The State Lottery retains up to
30 percent of the amount remaining after all payments to
players. The money kept by the State goes first to cover ad-
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159DELAWARE PARK
15 29 Del. C. § 4815.
16 For example, there may be a row of seven 25-cent VLTs set up
back to back with seven additional 25-cent machines.
ministrative costs of the video lottery and to fund a program
for the treatment of compulsive gamblers; the remainder of
the 30 percent is paid into the State’s General Fund. Of the
proceeds then remaining, the State deducts an amount nec-
essary to reimburse it for the costs of the VLTs, related
equipment, and the central computer system. The State then
pays the video lottery agent (i.e., the Employer) 10 percent
of whatever funds remain to be used by the agent only for
purses for horse races. Finally, any remaining funds are paid
to the video lottery agent as a commission.15
The Employer’s Operations
The Employer’s facility consists of a five-story main
building that is attached to a grandstand which the Employ-
er’s chief operating officer estimated seats 5000 to 10,000
people. The grandstand looks out over an oval horse race-
track. The facility also has an administration building adja-
cent to the paddock, an office building that is attached to the
main building, and other buildings for housing horses, etc.
From the testimony of the Employer’s chief operating offi-
cer, it appears that the first floor of the main building con-
tains some lockers, wash areas, and a receiving area; in addi-
tion, there is a walkway to elevators and escalators. On the
second floor, there are offices, some parimutuel windows,
simulcasting areas, concession stands, the Legends Res-
taurant, a deli, some bars, and all of the VLT machines. A
floor plan showing that portion of the second floor contain-
ing the VLT machines was submitted into the record. The
floor plan shows that the VLTs are grouped in rows or in
a circle and that they are grouped by the amounts of the
wager.16 In other words, the VLTs are arranged in a similar
style to many casinos. A ramp from the VLT area leads to
another section of this floor that contains additional pari-
mutuel and simulcasting betting. The next floor has another
area of parimutuel and simulcasting betting and a sports bar.
The fourth floor has a banquet type room where an individ-
ual can watch simulcast and live racing, an area for pari-
mutuel betting, and a traditional clubhouse restaurant. The
fifth floor of the main building is closed of to the public.
The second through the fourth floors have entrances to the
grandstand.
The Employer began its VLT operations in the last few
days of 1995. At the time of the hearing, Delaware Park op-
erated 1000 VLTs at its facility. In 1996, the VLTs were
available to customers 363 days a year, from 8 a.m. to 2 a.m.
(except on Sunday when the VLTs do not open until 1 p.m.).
As described above, all of the VLTs are located on the same
floor of the Employer’s facility. In 1996, an estimated $1.4
billion was wagered in the VLT operations and the Employer
received an estimated $56 million in gross revenue from the
VLT operations.
In 1996, the Employer conducted live horseraces on 139
days. The races were conducted between the hours of 12:30
p.m. and 5:30 p.m. The purses offered by the Employer in
1996 were double the size of the purses offered in 1995 be-
cause of the moneys added to the purses from the VLT oper-
ations. The Employer plans to have approximately the same
number of live racing dates in 1997 that they had in 1996.
In 1995, approximately $179 million was wagered through
parimutuel betting (live and simulcast), while in 1996, an es-
timated $233 million was wagered. The Employer’s pari-
mutuel revenues increased from approximately $22 million in
1995 to an estimated $25 million in 1996.
In 1996, approximately 62 percent of the Employer’s gross
revenues came from the VLT operations. The record also
shows that the Employer’s gross revenues from all sources
increased from approximately $27 million in 1995 to $91
million in 1996.
The Employer has distinct operating departments including
a separate VLT operations department that is headed by an
executive director of slots. The executive director of slots is
responsible for all phases of the slot operations and has ulti-
mate responsibility for the efficiency and profitability of the
VLT operations. His responsibilities include supervision,
training, and evaluation of all slot personnel. Some of the
Employer’s other departments have responsibilities connected
with the VLT operations. For example, the security and sur-
veillance department handles security and surveillance for
both the VLT operations as well as the parimutuel and racing
operations; the food and beverage departments serve both
VLT customers and racing/parimutual customers; the finance
and racing department handles the financial transactions for
both the VLT operations and the racing and parimutuel oper-
ations; and the maintenance department has duties covering
the Employer’s entire facility (VLTs, racing, and parimutuel
areas).
The Employer has one human resources department that
covers employees in all departments. The Employer has one
centralized payroll for all employees. All employees are sub-
ject to the same general employment policies. All employees
are eligible for the same medical benefits program and the
same worker’s compensation program. Upon being hired, all
employees (including the VLT employees) are required to fill
out an application with the Delaware Thoroughbred Racing
Commission. The Racing Commission collects employees’
fingerprints and conducts an investigation. Occasionally, the
Racing Commission has told the Employer that an investiga-
tion revealed that an employee had been arrested or con-
victed for an offense in the past or that they had falsified
their application in some way. The Employer then conducts
its own investigation and either resolves the matter by cor-
recting the Racing Commission’s information or by terminat-
ing the employee. Neither the Racing Commission nor the
State Lottery Office issues licenses to employees who would
be included in a bargaining unit.
The Employer jointly advertises its parimutuel wagering
and its VLT wagering. For example, four billboards along
interstate highways in Delaware reference or depict both the
Employer’s slots and horseracing operations. The record
shows that the Employer’s patrons come from the following
areas: approximately 45 percent from Delaware; 25 to 30
percent from Pennsylvania; 12 to 15 percent from Maryland;
and 7 percent from New Jersey.
The Employer’s VLT operations are year round— they are
not seasonal in any manner and no VLT employee has been
laid off from work. The record shows that the Employer
aims to hire permanent, full-time employees for its VLT op-
eration. The VLT employees typically work four 10-hour
days per week. When the VLTs were first installed, some
racing employees may have taken VLT positions, however,
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160 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
17 In determining whether it has jurisdiction, the Board considers
only whether the employer meets the definition of ‘‘employer’’
under Sec. 2(2) of the Act and whether such employer meets the ap-
plicable monetary jurisdictional standards. Management Training
Corp., 317 NLRB 1355 (1995). In determining the question of juris-
diction, the Board no longer assesses the quality and/or quantity of
factors available for negotiation by a private employer that contracts
with a government entity. Id. I have noted the degree of State regu-
lation in this case because it was one of the factors considered by
the Board in implementing Sec. 103.3 of the Board’s Rules and Reg-
ulations.
there is no record evidence of interchange between the VLT
employees and the racing employees. Finally, the VLT em-
ployees have a separate supervisory hierarchy that culminates
with the executive director of slots.
Legal Analysis
Under Section 103.3 of the Board’s Rules and Regula-
tions, ‘‘[t]he Board will not assert its jurisdiction in any pro-
ceeding under sections 8, 9, and 10 of the Act involving the
horseracing [sic] and dogracing [sic] industries.’’ In the state-
ment accompanying the rule, the Board stated as follows:
In prior decisions, the Board declined to assert juris-
diction over these industries noting, inter alia, the ex-
tensive State control over the industries. It appears that
State law sets racing dates of the tracks; State law de-
termines the percentage share of the gross wagers that
goes to the State; the State law determines the percent-
age of gross wagers to be retained by the track. In addi-
tion, the State licenses employees, exercises close su-
pervision over the industries through state racing com-
missions, and in many States retains the right to effect
the discharge of employees whose conduct jeopardizes
the ‘‘integrity’’ of the industry. As the industries con-
stitute a substantial source of revenue to the States, a
unique and special relationship has developed between
the States and these industries which is reflected by the
States continuing interest in and supervision over the
industries.
In addition, the sporadic nature of the employment in
these industries encourages a high percentage of tem-
porary part-time workers and results in a high turnover
of employees and a relatively unstable work force. This
is further evidenced by a pattern of short work hours
and sporadic and short periods of active employment by
any given employer.
Besides minimizing the impact on commerce of the
industries, this pattern of short-term employment also
gives us pause with respect to the effectiveness of any
proposed exercise of our jurisdiction in view of the se-
rious administrative problems which would be posed
both by attempts to conduct elections and to make ef-
fective any remedies for alleged violations of the Act
within the highly compressed time span of active em-
ployment which is characteristic of the industries.
Thus, we have concluded that the operations of these
industries continue to be peculiarly related to, and regu-
lated by, local governments and, further that our exer-
cise of jurisdiction would not substantially contribute to
stability in labor relations.
In the instant case I find that (1) the Employer’s VLT op-
erations are not regulated to such an extent by the State of
Delaware so as to preclude Board jurisdiction; (2) the stable,
year-round work force in this case would allow for effective
application of the Act and the Act’s remedies; and (3) the
Employer’s VLT operations are not local but, rather, are
clearly conducted in interstate commerce.
First, as to regulation by the State of Delaware, I note that
the Board has consistently asserted jurisdiction over casinos
and other types of gambling establishments despite the fact
that those entities were also regulated by the State. See El
Dorado Club, 151 NLRB 579 (1965) [Board asserted juris-
diction over a casino]; Grand Resorts, 221 NLRB 539 (1975)
[Board asserted jurisdiction over a jai alai facility]; The An-
thony Co., 220 NLRB 886 fn. 5 (1975), enfd. 95 LRRM
3239 (9th Cir. 1977) [Board asserted jurisdiction over a
poker club]. In addition, in this case I note that while the
State of Delaware regulates the VLT operations, the State
does not regulate the Employer’s labor relations. Thus, the
Employer is free to hire, fire, discipline and evaluate em-
ployees, set wages, schedule employees’ work hours and
week, decide on benefits, make work assignments, and set
job descriptions. The only role that the State plays in regard
to the Employer’s employees is that each employee must
submit an application, fingerprints and an application fee to
the State; the State does not license employees.17
Next, it is clear from the record that the Employer’s VLT
work force is very stable. I therefore find that the Board’s
concerns about the effectiveness of exercising jurisdiction in
this case because of the alleged temporary, sporadic nature
of employment in the racing industry, resulting in a high
turnover rate and an unstable work force, is not a concern
at all in this case.
Finally, it is also clear from the record that the Employer’s
VLT operations are interstate in nature. Thus, the Employer
advertises its VLTs (as well as horseracing) on interstate
highways. According to the record, the Employer competes
with Atlantic City, approximately 75 miles away, for its cus-
tomers. Moreover, the makeup of the Employer’s VLT pa-
trons show that approximately 60 percent of the patrons
come from States other than the State of Delaware. Based on
these facts, there can be no question that the Employer is en-
gaged in interstate commerce and that the Employer’s VLT
operations are anything but local in nature.
The State’s regulation of the Employer’s VLT operation
does not remove the Employer from the Board’s jurisdiction.
Because the Employer employs permanent full-time employ-
ees in the VLT operation which constitutes a stable, year-
round work force, and because the Employer’s VLT oper-
ation is clearly interstate in nature, I conclude that Section
103.3 of the Board’s Rules and Regulations does not prohibit
assertion of the Board’s jurisdiction in this case.
In so concluding, I am fully aware of Board decisions that
have described the test for determining if an entity is in-
volved in the horseracing industry as being whether the em-
ployer’s operations are ‘‘integrally related’’ to horseracing.
Waterford Park, 251 NLRB 874 (1980), affd. 109 LRRM
2289 (D.C. Cir. 1981) [Board asserted jurisdiction over a
motel located on the same grounds as a horse racetrack and
owned by the same company that owned the racetrack be-
cause the motel was not integrally related to the horse track];
Ogden Food Service, 234 NLRB 303 (1978) [Board asserted
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161DELAWARE PARK
18 Contrary to the Employer’s assertion, the Board will not decline
to assert jurisdiction over an employer merely because one aspect of
that employer’s business operation is not subject to Board jurisdic-
tion. For instance, although the Board does not have jurisdiction
over religious institutions, the Board does assert jurisdiction over
certain business operations of religious institutions. See The Salva-
tion Army of Massachusetts, 271 NLRB 195 (1984), enfd. 119
LRRM 2587 (1st Cir. 1985); Denver Post of the National Society
of Volunteers of America v. NLRB, 723 F.2d 302 (3d Cir. 1982),
Tressler Lutheran Home for Children, 677 F.2d 302 (3d Cir. 1982).
19 Administrative notice is taken of Prairie Meadows Racetrack &
Casino, Cases 18–RC–15972, 18–RC–15997, and 18–RC–15998. In
these cases, a Regional Director found that it would not effectuate
the purposes of the Act to assert jurisdiction over an employer who,
like the Employer in the instant case, operated both a horse racetrack
and a casino on the basis that the employer was involved in the
horseracing industry. Each of these cases is currently pending before
the Board pursuant to Board Orders dated November 22, 1996,
granting the petitioner’s request for review.
jurisdiction over employer who provided food and beverage
services at a horse racetrack owned by another company].
The Employer argues in this case that its VLT operations are
integrally related to its horseracing operations because one
would not survive without the other. The Employer’s argu-
ment is based on (1) the fact that its horseracing operation
would not survive financially without the support of funds
from the VLT operation and (2) the fact that the VLT oper-
ation cannot exist without horseracing because, under Dela-
ware law, VLTs can only be located within the confines of
a horse racetrack.
The Employer’s first basis for its argument must be re-
jected because the Board’s use of the phrase ‘‘integrated’’
traditionally refers to a degree of functional integration rather
than strictly financial integration. In this case, the Employ-
er’s VLT and horseracing operations are not functionally in-
tegrated. While the two operations make use of some of the
same administrative departments, the operations do not rely
on each other at all to function. In other words, the
horseraces can take place whether or not the VLTs are oper-
ating and the VLTs can be operated whether or not there is
a horserace going on. I do not find persuasive the Employ-
er’s argument that its VLT and horseracing operations are in-
tegrated merely because some of the money from the VLT
operations is used to increase the purses of horseraces. If the
mere financial relationship of the two operations was suffi-
cient to make one functionally integrated with the other, then
hypothetically any employer could add a horse racetrack to
its facility to evade Board jurisdiction.18
Nor are the facts of this case similar to those of the em-
ployer operating the off-track betting business in The Downs
at Lehigh Valley, supra. In that case, unlike the instant case,
all of the employer’s employees were required to be licensed
by the Pennsylvania Harness Racing Commission, the off-
track betting operation involved wagering on horses and the
money wagered by the customers of the off-track betting site
was included in a common parimutuel pool with money from
other primary and nonprimary locations of the employer’s
horseracing operations.
The Employer’s second basis for its ‘‘functionally inte-
grated’’ argument is that, under Delaware law, the Employer
could not have the VLT operation if the Employer was not
a horseracing track. This argument is also insufficient to es-
tablish functional integration of the VLT and the horseracing
operations. The statutory basis which permits the Employer
to operate slot machines does not create a relationship be-
tween the operations of the slot machines and the horseraces.
The Board has specifically held that casinos and the employ-
ers who operate businesses based on slot machines are sub-
ject to the Board’s jurisdiction. The fact that slot machines
in Delaware are limited to the premises of horse racetracks
does not imbue the slot machine business with any of the
traits that gave rise to the Board’s decision to eschew juris-
diction over horseracing.
The facts in the instant case are novel and are not squarely
governed by any of the Board’s previous cases involving in-
terpretation of Section 103.3 of the Board’s Rules and Regu-
lations.19 In this case, the Employer’s VLT or slot operation
has become its main source of revenue and its main business.
To argue otherwise would be to ignore the realities of this
case. The Employer collected gross revenue of $56.8 million
from the VLT operation in 1996 compared to $25.8 million
in gross revenue from all parimutuel betting (live and simul-
cast). Total gross revenue in 1995 (when the VLTs were
only operational for a few days) was approximately $27.4
million, while total gross revenue in 1996 (with a full year
of the VLTs) the Employer’s total gross revenue was esti-
mated to be $91.5 million. The VLT operation has trans-
formed the Employer’s business other than just in terms of
revenues. The Employer now does business all year long,
while prior to installation of the VLTs, there was a
seasonality to the business. The Employer now employs a
larger work force and the work force is made up of perma-
nent, full-time workers. Through the addition of the VLT op-
eration, the Employer has become more akin to a casino with
an occasional horserace conducted on the premises.
CONCLUSION
For all of these reasons, I find that the Employer’s VLT
operations do not involve the horseracing industry and that
it will effectuate the purposes of the Act to assert jurisdiction
in this case.
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