Running Aces sues tribal casinos, claiming card games aren’t authorized by state

Running Aces, one of the state’s two horse-racing tracks, filed a federal racketeering lawsuit Tuesday claiming tribal casinos in three locations have offered card games not authorized under state law.

The lawsuit by the track, which operates in Columbus in the northeast Twin Cities metro, named executives at Grand Casinos in Hinckley and Mille Lacs, owned by the Mille Lacs Band of Ojibwe, and Treasure Island Resort & Casino, owned by the Prairie Island Indian Community.

Running Aces contends the casinos have been offering “Class III” card games not authorized by state compacts under the 1988 Indian Gaming Regulatory Act. In the compacts, both the tribes and the state agreed to limit casinos to video games of chance, known as slot machines, and blackjack, according to the Alcohol and Gaming Enforcement Division of the state Department of Public Safety.

The two Grand Casinos have offered not only blackjack but other Class III card games, such as Three Card Poker and Ultimate Texas Hold ’Em, which are not covered by their state compact. The same was true at Treasure Island until last October when its compact was amended to allow other Class III games, the lawsuit states.

The unauthorized games violate the law and gave tribal casinos “illegal and unfair competitive advantages over Running Aces,” which also offers card games such as blackjack, Three Card Poker and Ultimate Texas Hold ’Em, the lawsuit said.

“All that we have ever sought was to be treated fairly, compete on a level playing field, take advantage of improvements within the pari-mutuel environment, and operate without fear of being eliminated,” Running Aces CEO Taro Ito said in a written statement. “It is our sincere desire to have our day in court and let the facts determine the outcome.”

The lawsuit comes with just five weeks remaining in the 2024 legislative session, and lawmakers have yet to decide whether to legalize mobile sports betting. The proposal is creating tension with the state’s two horse tracks, including Canterbury Park in Shakopee, who want a piece of the expanded action.

The main bills at the DFL-controlled Legislature would give tribal nations the exclusive rights to partner with an established sports betting platform such as DraftKings or FanDuel. The bills offer stipends to the tracks to share, with the House proposal offering $625,000 and the Senate $3 million.

The tracks say the amounts offered aren’t enough and that mobile sports betting threatens their existence. Two weeks ago, the Minnesota Racing Commission voted to authorize Historical Horse Racing (HHR) in May, a day after the Legislature adjourns. HHR is a machine-based game in which players can wager on past horse races. The tracks have advocated for the option, saying it would provide significant revenue.

In response, DFL leaders acted swiftly to introduce bills to explicitly ban HHR, which they say amounts to video slot machines in violation of the tribes’ exclusive rights to offer casino gambling. The Shakopee Mdewakanton Sioux Community has already filed an appeal, asking the state Court of Appeals to declare HHR illegal.

To pass a sports betting bill, it has been widely assumed Republican votes will be needed and they will only come if the tracks are satisfied. The new lawsuit will raise the temperature of the debate that pits DFL loyalty to the tribes against Republican support for the tracks.

Running Aces seeks unspecified damages from high-level tribal executives and managers as well as an injunction against what it views as illegal card games.

Representatives for the tribes didn’t respond to requests for comment.

Staff writer Rachel Blount contributed to this report.