Online, phone betting plan dropped from horse racing bill at Legislature

With horses set to arrive at Canterbury Park this weekend, track officials are making plans for a shortened racing season. But Minnesotans who want to wager on races at the Shakopee track might be out of luck.

A bill authored by state Reps. Brad Tabke (DFL-Shakopee) and Tony Albright (R-Prior Lake) would have allowed state residents to bet online or by phone on races held in Minnesota through 2021. That provision has been stripped out of an amended version that will be heard Wednesday by the House Commerce Committee. Horse racing in the U.S. is currently being run without spectators, and if fans are not permitted at Canterbury and Running Aces harness track in Columbus, Minnesotans would not be able to bet on the races under current law.

Through advance deposit wagering (ADW), horseplayers can place pari-mutuel bets online or by phone using money in accounts managed by licensed providers. Minnesota legalized ADW in 2016, but only for out-of-state races.

Andrew Offerman, Canterbury's vice president of racing operations, said wagering from home would have been "the perfect social-distancing solution" for the track's fan base. But in a packed legislative session on a tight timeline, Tabke said the proposal needed wide support to pass, and it was doomed by opposition from those who viewed it as an expansion of gambling.

"We had to introduce the bill before everything was fully negotiated, and we could not reach full agreement between all of the different parties," Tabke said. "So we had to pull that piece out.

"We knew it would help both of the tracks. But we just could not get to a compromise that worked for everyone. So we sacrificed that part of the bill in order to get some other things that we knew really would help the tracks."

The amended bill would permit the Minnesota Racing Commission to cut the number of live racing days required for a card-club license. Under current law, Canterbury and Running Aces must run at least a 50-day season to operate their card clubs; the bill would allow for fewer days if there are circumstances beyond the tracks' control. Both tracks were scheduled to start their seasons in mid-May, but both have delayed their openings and have not announced new dates.

The revised legislation also would reduce the amount the tracks pay for state oversight, shifting more of the burden to ADW operators by increasing their regulatory fees from 1% to 2%. Both of those provisions would run through 2021.

Allowing advance deposit wagering on in-state races would have benefited both the tracks and the horsemen's purse funds. Offerman said an average of 18.5% is taken out of every bet placed at Canterbury on its live races, split evenly between the track and the purse fund. That revenue — which was about $2 million last season — will disappear if fans are barred from the track.

Offerman estimated online and phone wagers placed by Minnesota residents would have yielded a cut of 7% to 8% for horsemen and the track. For out-of-state wagers on Canterbury races, which could be the only type of betting allowed this summer, the cut averages only 4%.

"It would make a ton of sense for our patrons to be able to participate in the sport in a guaranteed safe way during unprecedented times," Offerman said. "With no patrons or very limited patrons, there's essentially no in-state revenue stream available to us, which makes things very difficult for Canterbury and the purse account."

Offerman said ADW is legal in 32 states, but only two — Minnesota and New Mexico — restrict it to out-of-state races.

Canterbury is considering one creative way to generate in-state revenue: Drive-through wagering. It could allow horseplayers to drive into the parking lot, then bet through a Canterbury app connected to the track's Wi-Fi network. That would be considered an on-track wager.

Tabke said he doesn't expect any further changes to the amended bill, which also would let the tracks and their horsemen use some purse funds for mutual projects. The original version would have waived the annual $253,000 licensing fee that Canterbury and Running Aces each pay to the state, but that section was removed.