Minnesota is home to two prominent horse racing tracks: Canterbury Park and Running Aces. Both have become casino/resort properties and contribute significantly to the state’s economy.
Businesses across Minnesota inundated lawmakers with requests for assistance as the coronavirus pandemic took hold two months ago. Most asked for financial assistance, but some wanted opportunities.
The two Minnesota racetracks hoped for a variety of actions from lawmakers. They wanted some breaks in regulatory fees and changes in licensing requirements to accommodate the changes required by the COVID-19 shutdowns. In addition, they hoped to expand wagering in the state so racing fans could place their bets online and via a mobile app.
Lawmakers decided to grant half of those wishes.
A Story of Two Bills
On April 23, one month after most nonessential businesses closed, four Minnesota State Senators introduced SF4504. The basic description pertained to “wagering and simulcasting provisions modifications” and “waivers and expenditures provisions authorization.”
Days later, two members of the Minnesota House passed a companion bill but one that differed significantly from the Senate version. HF4597 listed its goal as to modify revenue and reimbursement provisions and assign “discretion to the commission for operation of a card club.”
The Senate bill didn’t move beyond the State Government Finance and Policy and Elections Committee. The House bill, however, started in the Commerce Committee, and it was amended, adopted, and sent to the State Government Finance Division. It moved around continuously during the second week of May.
On May 15, the third reading in the House led to a vote, which passed by 97-34. It immediately went to the Senate, and a third reading passed it by a 65-2 vote. And Governor Tim Walz approved it on May 18, just one day after the final Senate vote.
Contents of MN HF4597
Regarding purses, a licensee may deduct a percentage of pari-mutuel pools, including breakage, for race purses. This does require the licensee to establish a contract with an organization representing the majority of the horsepersons involved. The new percentages are as follows:
- Live races at a Class C facility = 8.4% of handle
- Simulcasts at a Class A facility = at least 37% of amount remaining after deductions for state pari-mutuel taxes, payments to breeders’ funds, and payments to out-of-state track for signal
The licensee is required to pay the horsepersons’ organization an amount determined by an agreement and sufficient to provide for capital improvements and expense reimbursements for live racing. This is to benefit the horsepersons racing at that licensee’s facility and aid in programs, benefits, and services for horsepersons and their on-track employees.
The licensee must sign an agreement that is approved by the Minnesota Racing Commission regarding purses from simulcast wagering. Money for those purses must be used for live races involving the same breed as racing in the simulcast. This must happen prior to the first day of a live mixed meet.
The licensee may adjust the amount of money set aside for purses (per overpayments and underpayments) if agreed upon with the horsepersons’ organization.
With regard to payments to the state, the amendments are:
- Minnesota bettors must pay a 2% regulatory fee on all amounts wagered. The fees must be deposited in the Minnesota Treasury and credited to a special account to offset the costs of regulated horse racing and pari-mutuel wagering.
- Minnesota bettors must pay a 0.25% breeders fund fee on all amounts wagered. This will also go to a Treasury account, this one to offset the costs of administering the breeders fund and to promote horse breeding in the state.
The limitation on card club operations is now amended to accommodate circumstances “beyond the licensee’s control.” This means that the license may remain intact even if the club did not operate at least 50 days of live racing at the Class A facility within the past 12 months.
Finally, the bill changes the requirement that licensees reimburse the Minnesota Gaming Commission for actual costs of regulating their card clubs. The new language reads that it “may” require the reimbursement.
These new provisions are temporary and will expire on December 31, 2021.
Meanwhile…At the Tracks…
Canterbury Park revised its season, and it’s ready to go. It will begin on June 10 and run for 52 days, concluding on September 16. Races will run Mondays through Thursdays from 4:30pm to 10pm.
At this point, all races are scheduled to run without fans, but as the situation evolves, Canterbury Park hopes to change that policy.
Fans will be able to watch the races via a new online streaming service to be announced soon. The facility is also preparing information about curbside walk-up wagering and drive-thru wagering to be offered as the season begins.
Running Aces is still finalizing its dates and details, but it hopes to kick off the live racing season on June 20. No spectators will be allowed at this track, either, but all involved hope that will change.
If approved, qualifying races may begin on June 10. When official racing begins on June 20, it will offer a typical schedule of Saturdays, Sundays, and Tuesdays – with a few exceptions – through October 4.
