Although Minnesota was projected to be one of the likeliest states to regulate sports betting in 2024, those odds plummeted after a horse track filed a lawsuit accusing two of the gaming tribes of offering illegal card games and damaging the track’s business.
Clash of Interests
There has been no love lost between Minnesota’s horse racing tracks and the state’s gaming tribes. The former wants a share in the sports betting business when it ultimately arrives while the latter wants it all.
As for legislative advocates, the Republicans believe the horse tracks deserve their fair share while the Democrat-Farmer-Laborer party has been a historical ally of the tribal nations, and many DFL members, although not all, are advocating for tribal exclusivity when sports betting eventually gets passed.
The tribes have killed several previous sports betting initiatives, going as far back as 2020 when John McCarthy, executive director of the Minnesota Indian Gaming Association (MIGA), submitted written testimony to the Senate State Government Finance and Policy and Elections Committee, stating that “Minnesota tribes remain concerned that a legal sports betting market could have negative consequences to the state’s delicate gaming industry.”
The tribal nations have only recently warmed to sports betting but only if it is under their sole control. The horse racing tracks have opposed some of those bills in which they would receive a small percentage of the sports betting revenue, as they would like their own opportunity to partner with the national platform providers and run retail and mobile sportsbooks for themselves.
Tit for Tat
Historical horse racing (HHR) machines look just like slot machines but there is a component to them that allows a user to pick out the win/place/show order of finish in historical horse races. The vast majority of people don’t use this feature and instead let the machine pick for them, but that wrinkle allows horse tracks to circumvent the law that decrees slot machines are the exclusive domain of gaming tribes in Minnesota.
DFL lawmaker, Zach Stephenson, has filed legislation in the form of HF 5274 that would ban historical horse racing. He was emphatic that it would not be a bargaining chip to woo horse tracks to support a sports betting bill.
“I just want to be very clear with folks, there is no universe in which any bill that leaves this committee is going to authorize historical horse racing at the tracks,” he said. “That’s a total nonstarter, will not happen, will not be part of a sports betting deal. Bright red line in the sand.”
More Conflict
The Minnesota Indian Gaming Association has publicly supported HF 5274 and that drew the ire of Running Aces, a Minnesota horse track. Running Aces then filed a lawsuit in the US District Court for the District of Minnesota against the Mille Lacs Band of Ojibwe, which operates the Grand Casino Hinkley and Grand Casino Miles Lacs, and the Prairie Island Indian Community, operators of the Treasure Island Resort & Casino, for violating the federal Racketeer Influenced and Corrupt Organizations Act, often referred to as the RICO Act.
Running Aces accuses the tribal casinos of running illegal card games like Ultimate Texas Hold’em and Three Card Poker that are not included in their compact with the state, as only blackjack is allowed. It should be noted that the Prairie Island Indian Community amended its compact in October 2023 at its Treasure Island Casino to expand its menu of card games.
Running Aces CEO Taro Ito said in a written statement, “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. It is our sincere desire to have our day in court and let the facts determine the outcome.”
The horse track seeks treble damages and because of the disparate political allegiances in the Minnesota legislature. It is highly unlikely a sports betting bill will pass by the time the session adjourns on May 20th.
