A recent approval by the Minnesota Racing Commission to grant horse tracks in the state the ability to offer historical horse racing machines has triggered a backlash from a Minnesota Indian tribe that is asking an Appeals Court to rescind the regulatory change.
Not So Fast
Historical horse racing (HHR) machines are virtually identical to slot machines but manufacturers circumvent existing US gambling laws by predicting the outcome on previous horse races. Slot machines, on the other hand, are randomly generated without relying on any previous outcomes from any other sources.
If it sounds peculiar, it is, but these machines are growing in popularity and allow a loophole for tracks to provide them as another gambling option which is often in direct conflict with the casinos that offer virtually the same product but are licensed and pay taxes to the state for the privilege.
This scenario has recently manifested in the North Star State as the state’s two horse tracks, Running Aces and Canterbury Park, applied for 500 HHR terminals and the Minnesota Racing Commission unilaterally granted both horse racing tracks the authority to offer HHRs to their customers.
The Tribe’s Objection
This triggered an immediate response from the Shakopee Mdewakanton Sioux Community, which filed a petition with the courts to block the regulatory change. Attorneys for the tribe wrote to the court stating the following in their petition:
“The community seeks an order from the Court of Appeals reversing the commission’s decision because it exceeded the commission’s statutory authority, was based on an erroneous legal theory, procedurally defective, unsupported by substantial evidence, arbitrary and capricious, and a violation of the community’s due process rights.”
It also spawned legislation to block the games and protect the interests of the tribal casinos in the state. “I think the slot machines are not lawful at the tracks,” Rep. Zack Stephenson, DFL-Coon Rapids. “I think the racing commission took an unlawful action last week when they approved them and this bill corrects it.”
But the legislation also bans stadium-style card games that are operating at the tracks, which would put a fiscal dent into the horse tracks’ bottom line.
Tracks Clap Back
Naturally, the horse tracks are displeased with the measures taken by both the tribe and the state legislature. They are hanging their hats on the theory that the HHRs are skill-based games as opposed to slots that are strictly random generators.
“Somebody who understands handicapping is going to do better than someone who doesn’t understand handicapping,” said Evan Nelson, an attorney for Running Aces. “That’s the reason it is not a game of chance.”
Randy Sampson, chief executive at Canterbury Park, said the state’s horse tracks need more revenue streams to compete with the other forms of gaming in the state.
“Each of these Minnesota gaming industries provide different types of economic community development with positive impacts throughout the state,” Sampson said. “As technology and consumer preferences evolve each of these groups is subject to the same competitive pressures and the need to adapt.”
A compromise could be reached if the tracks decide to forfeit their interests in sports betting in return for the HHRs. Whether that is compromise enough for the Shakopee Mdewakanton Sioux Community remains to be seen.
