Politics and Government

Horse track betting plan could stumble amid pushback from key gambling players

Horse racing
In this photo taken on June 29, 2010, the field comes around curve during a harness race at Running Aces Harness Track in Columbus. A state audit has concluded that operators of the track shorted race purses by nearly $437,000 over four years in which regulators failed to adequately scrutinize the payouts.
David Brewster | Star Tribune via AP

Minnesota lawmakers are trying to broker a sports-betting deal yet again this legislative session, but there’s a new hold-up in the track. 

This week, a regulatory board approved new games for horse tracks against the advice of another state agency that considers machine-based betting similar to video poker. It has also riled tribal officials who say they weren’t consulted. 

It has reverberated at the Capitol, where lawmakers are debating a more-significant change to state gambling laws. The sponsors of that proposal said the sudden shift could factor into their legislation, including a potential prohibition to the new at-the-track games.

The new form of gambling is called Historical Horse Racing and it’s done on a betting terminal.

Players pick a digital horse without knowing the race they’re betting on; the machine randomly selects a race from the past. If a player picks the digital horse that wins, they win a monetary prize. 

In January, Canterbury Park in Shakopee and Running Aces in Columbus asked the commission to approve wagering on Historic Horse Racing. On Monday, commission members voted 5 to 1 to approve Historical Horse Racing.

Running Aces issued a statement, calling the approval a “lifeline for survival” and noted it will be effective the day after the 2024 legislative session, May 21.

The track operators say the hundreds of potential terminals could generate millions of dollars that would flow into race purses and toward the state’s horse-breeding industry. They insist it’s in line with other forms of betting already allowed at the tracks.

But other stakeholders say the commission doesn’t have jurisdiction to approve the games. The Alcohol and Gambling Enforcement Division for the state's public safety agency wrote in a memo last month that this form of gambling was more slot machine than pari-mutuel betting. 

The sports betting bills under consideration this year give exclusive rights to the state’s tribes. 

Native American tribes are not happy with the commission’s decision and have said they may sue to stop this addition to the gambling landscape. 

“Slot machines not located on tribal land remain illegal in Minnesota," Minnesota Indian Gaming Association Executive Director Andy Platto said in a written statement. “After decades of debate at the Capitol on the topic, the Racing Commission decided to usurp legislative authority and unilaterally authorize slot machines at the state’s horse tracks.”

Sports betting doesn’t fall along party lines and the fight spilled out into a hearing Wednesday. 

“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,” said Rep. Zack Stephenson, DFL-Coon Rapids and the sponsor of the main sports-betting proposal. “That’s a total nonstarter that will not happen, will not be part of a sports betting deal. Bright red line in the sand.”

Others stuck up for the horse tracks.

“It seems like this is a really easy way to help make these other organizations whole,” said Rep. Anne Neu Brindley, R-North Branch. “And it still doesn’t make them whole. I mean, we’ve seen significant losses in other states when when we’ve opened up sports betting”

Stephenson’s bill allows the tribes to partner with established betting platforms and would give the horse tracks $625,000 per year.

A spokesperson for Gov. Tim Walz told MPR News the governor is frustrated by the approach the Racing Commission took. He appoints the members to that body.