Ban on historical horse racing advances swiftly after Racing Commission tried to legalize casino games

A Minnesota legislative panel prepared Monday to ban historical horse racing (HHR), a swift rebuke to the Minnesota Racing Commission’s vote just one week ago to legalize the casino-style games.

“I think the Racing Commission took an unlawful action last week, and this bill reverses that,” said Rep. Zack Stephenson, DFL-Coon Rapids, as he introduced his bill to the House Commerce Committee on Monday.

In response, racing industry supporters brought to the Capitol steps Numbered Account, a friendly 8-year-old harness racing horse who has earned $250,000 in his career around the country, including at Running Aces. That horse racing track in Columbus, along with Canterbury Park in Shakopee, is one of two in the state.

The tone was not as calm as the horse. Tension is rising as the Legislature passes the session’s midpoint and decisions must be made about whether and how to legalize mobile sports betting. DFL leaders have bills that would give the state’s tribal nations exclusive rights to partner with a gambling platform and allow Minnesotans to bet on their phones 24/7.

The state’s tracks say the expansion of gambling would cost them revenue and potentially put them out of business. Republican supporters have said they will only support a bill that helps the tracks. The Racing Commission’s vote last week to legalize HHR shook up the discussion.

Thoroughbred horse owner and Minnesota Horsemen’s Benevolent & Protective Association President Justin Revak urged discussion. “Legislators could bring all parties together and an agreement that works for all could be negotiated,” he said.

The tracks say HHR would eventually bring in millions that would keep them healthy and aid their live-racing purses. No one at the Capitol was seriously pursuing legalized HHR until the commission vote.

To help the tracks, the main sports betting bills would give the tracks direct subsidies. The House bill would provide $625,000 and the Senate bill $3 million for the tracks to share annually.

Running Aces CFO Tracie Wilson said the amounts are inadequate and that Stephenson’s bill would go beyond banning HHR. His bill would target parimutuel rules that have been in place since 1982, she said.

HHR and mobile sports betting weren’t directly connected in the debate about sports betting until the Racing Commission’s vote. DFLers were furious, saying HHR is illegal video slot machines in violation of the tribal nations’ exclusive rights to offer casino gambling in Minnesota. They also say the commission exceeded its authority.

In a show of strength, the bill also is sponsored by House Speaker Melissa Hortman, DFL-Brooklyn Park, and Majority Leader Jamie Long, DFL-Minneapolis. “Whether we have sports betting or not, I anticipate making it extremely plain in Minnesota law that the racing commission’s decision will not stand,” Hortman said last week.

Racing industry supporters say that Stephenson’s bill would ban existing stadium-style games, such as blackjack where individuals go into a private betting booth and watch a dealer on video.

Stephenson said his bill would close a loophole in the law that allows “stadium-style games” at the tracks.

Under state law allowing card games at the tracks, the clubs can have a maximum of 80 tables, a change the state made in 2012. Before that the maximum was 50 tables.

The problem is that a table isn’t defined in state law, and with video technology, players can enter their own booth and play multiple hands at once with one dealer in a digital image. Stephenson said the technology “renders table limitation meaningless.”

He likened it to each player having their own Playstation, able to play multiple hands with a lower buy-in.

At a traditional table, only seven hands can be played at a time. With the technology, Stephenson said 33 hands could be played off one dealer.

Stephenson said his bill wouldn’t change anything about how Minnesotans bet on live horse racing.

“Some people have accused me of having it out for the tracks,” Stephenson said. “That’s not true. I have no problem with the tracks. ... They’re a good asset to the community. I’ve been many times.”

But Wilson countered that Stephenson’s bill would cost Running Aces about 50% of its revenue from games, imperiling the business.

The underlying issue is whether supporters of mobile sports betting can get enough votes from both parties to pass a bill. Democrats are closely allied with the state’s tribal nations, although some DFL legislators do not support expanded gambling. That means the DFL would likely need GOP votes to legalize mobile sports betting.

Republican leaders have been adamant that a bill to legalize sports betting must give support to the tracks.

Stephenson said it’s also time for a discussion about a unified state gambling authority. He listed several agencies, boards and commissions that now oversee aspects of gambling.

The House panel was expected to send Stephenson’s bill to the House Ways and Means Committee for further discussion.

Regarding the Racing Commission vote last week, Julie Idelkope was the only commission member to vote against the legalization of HHR. Voting for the machines were Barbara Colombo, Raymond Dehn, Alan Gingold, Lisa Goodman and David Koob. Chairwoman Camille McArdle didn’t vote.

Staff writer Rachel Blount contributed to this report.