Minnesota Now with Cathy Wurzer

Running Aces CFO says historical horse betting is a ‘lifeline’ for Minnesota race tracks

Horse racing
The field comes around curve during a harness race on June 29, 2010 at Running Aces Harness Track in Columbus.
David Brewster | Star Tribune via AP

There’s some turmoil at the state capitol over something called historical horse racing, also called instant racing, where betters pick a horse in a digital horse race that has been run in the past.

The state’s horse racing tracks, Canterbury Park in Shakopee and Running Aces in Columbus, say historical horse racing is a critical revenue source for them. Lawyers for tribal nations in Minnesota say historical horse racing is too similar to slot machines, which tribes have exclusive rights to host in their casinos.

DFL Representative Zack Stephenson is an author of a bill banning historical horse racing that had another hearing Monday morning.

“I just want to be very clear with folks, there is no universe in which any bill that leaves this committee is going to authorize historical horse racing at the tracks,” he said. “That’s a total nonstarter will not happen will not be part of a sports betting deal. Bright red line in the sand.”

Stephenson is also the author of the larger sports betting bill making headlines right now. The latter will legalize sports betting, but with the tribal nations running the sports books.

The CFO of Running Aces, Tracie Wilson, joined MPR News host Cathy Wurzer to talk about the state of Minnesota race tracks and the debate in the legislature.

Use the audio player above to listen to the full conversation.

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Audio transcript

[MUSIC PLAYING] CATHY WURZER: There is some turmoil at the State Capitol over something called "historical horse racing." It's also called "instant racing," where bettors pick a horse in a digital horse race, a race that has been run in the past. The state's horse racing tracks, Canterbury Park in Shakopee and Running Aces in Columbus, say historical horse racing is a critical revenue source for them. Lawyers for the tribal nations say historical horse racing is too similar to slot machines, which tribes have exclusive rights to host in their casinos. DFL State Representative Zack Stephenson is the author of the bill banning historical horse racing. That had another hearing this morning.

ZACK STEPHENSON: And I just want to be very clear with folks. There is no universe in which any bill that leaves this committee is going to authorize historical horse racing at the tracks. That's a total non-starter. Will not happen, will not be part of a sports betting deal. Bright red line in the sand.

CATHY WURZER: He mentioned that sports betting bill. He's also the author of that larger bill making headlines right now. The latter will legalize sports betting, but with the tribal nations running the sports books. The CFO of Running Aces Horse Track, Tracie Wilson's on the line right now. Tracie, thanks for joining us.

TRACIE WILSON: Hi, Cathy. Thanks for having me.

CATHY WURZER: Running Aces issued a statement that called the approval of historical horse racing a lifeline for survival. That doesn't sound good. How are you all doing when it comes to your finances?

TRACIE WILSON: Oh, I tell you, it's really a stressful time with what's going on at the Capitol. You've got the sports betting bill going through. And at this point, they do not have the racetracks getting a license. It's going to be exclusive for tribal casinos. And so we're out in the cold, if you will. And what Representative Stephenson's bill is doing is putting in that the racing industry would receive $625,000 to be split five ways out of the taxes from sports betting.

Now, that's not going to do anything for us. And of course, if sports betting goes through, that's going to have a huge negative impact on the racing industry because revenues that we're used to right now, you're going to have people that they're going to have their disposable income to use on their phones from their couches. And it's just going to really negatively impact us. So what the MRC did, what you were talking--

CATHY WURZER: Actually, let me ask, Tracie, for just a moment. So Representative Stephenson says, as you say, you're out in the cold when it comes to the sports betting bill. Did you then or did the racing commission MRC look at historical horseracing as a way for the tracks to compete?

TRACIE WILSON: Absolutely. So what we've been doing is working on this new parimutuel product, which is completely under our rules and legal. It's just that instead of betting on a live race at the track, you're betting on a past race from that terminal that is just like what we're using today to bet on current races. But of course, you're going to obscure the past race that you're betting on. But you can handicap the race, just like you do today. And if you're a better handicapper, you're going to win more. So it's a completely 100% parimutuel.

CATHY WURZER: What's been the experience? Because instant racing has been going on at other tracks, other states since I think the early 2000s. What's been the experience in other states over this?

TRACIE WILSON: Well, it's just been a complete lifeline. Of course, everyone's aware of Kentucky and what it's done there. But of course, it's in Virginia. It's Wyoming. And it's just done great things for those states. And it's really been a lifeline to the racing industry. So for us, the Minnesota Racing Commission did their job. They vetted this. They reviewed the hundreds of pages of research on this product. And GLI, Gaming Laboratories International, who they look at all kinds of products and give their opinions on 70% to 80% of them out there, and they certified that it's 100% parimutuel.

So we're really thankful for what the MRC did, but completely shocked when Representative Stephenson on Thursday, right after the MRC voted to approve this, introduced that bill that not only eliminates HHR, this parimutuel historical horseracing product, but it goes further and it's eliminating current games that we offer today. So it's just going further, and it's really too bad.

CATHY WURZER: Historical horseracing does look and kind of operate much like slot machines, which concerns the tribal casinos. Could or is historical horse racing can be done in a different way perhaps so it doesn't run afoul of what the tribal nations say is you're stepping on their toes?

TRACIE WILSON: Well, I've heard that, that they say it looks like a slot machine. But at the end of the day, because something might appear similar, does that mean it's not legal? No, there's nothing saying that you can't have something look like it. If I could show you pictures, it looks like our existing terminals. Now, the terminal for this new parimutuel product that's on past horse races, of course, there's going to be an entertainment screen above.

So that's a little bit different than our current terminal today. But you actually sit there and you can see the end of the races or you can see the whole race so you know exactly how your horse has finished after you handicapped and made your selections.

CATHY WURZER: I'm wondering here-- go ahead, go ahead.

TRACIE WILSON: I was just going to say, the only way you win is if your horses placed. So it's totally based on the outcome of that race.

CATHY WURZER: So you mentioned at the beginning, Tracie, that this has been a real lifeline to other horse racing tracks across the country. And I'm wondering, can you give folks an idea why is revenue declining for racetracks in the first place? Are folks just losing interest in the live horseracing product? Or is something else going on?

TRACIE WILSON: Well, I feel like it's the explosion of all gaming and things keep modernizing, and of course, we're sports betting here. And people like instant gratification. So sometimes if you're at the track, it takes 15 minutes before the next race comes up or 20 minutes. So I think it's kind of a combination, so.

CATHY WURZER: Of course, as you also said, horse tracks would collectively receive $625,000 per year under what the bill that's currently moving through the legislature. That's how much we're talking about. As you say, that's not much between all parties involved. Any other avenues that tracks are looking at to increase revenue?

TRACIE WILSON: Well, if sports betting goes through, they need to figure out how to fairly compensate us. And I think this new parimutuel product needs to go through. Now, Shakopee Mdewakanton Sioux community, they filed a suit trying to do just that, bring this to say, well, if it's 100% parimutuel, let's have it go through the Minnesota Court of Appeals and have them evaluate it. And I certainly think that's the way it should go is they've taken their stance, and let's see what happens.

I don't think our legislators should pick winners and losers. I just think that's wrong. They should want a thriving tribal casino business. And they certainly should want a thriving racing industry in Minnesota. I mean, we've been around forever. I mean, 1982 is when Minnesotans passed the constitutional amendment saying we want parimutuel betting here. Canterbury opened up in 1985.

This industry is just way too important. There are so many employees, there are so many others working in the racing industry that are going to be negatively impacted. And we face being put out of business. It's a $500 million industry, and we're threatening us. I just think legislators need to do everything in their power to make all of us thrive, prop us up. Don't try and take something away.

CATHY WURZER: Tracie Wilson, thanks for your time.

TRACIE WILSON: Thanks, Cathy. I appreciate it.

CATHY WURZER: Tracie Wilson is the CFO of Running Aces in Columbus.

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