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Wendy Reuer, Published August 30 2012

Commission delays decision on horse racing’s future in Fargo

BISMARCK – A decision on whether there’s enough financial support for horse racing to return to Fargo next summer will have to wait until the state Racing Commission has its own funds in place.

At a Racing Commission meeting Thursday, the first since Fargo’s North Dakota Horse Park held races in July after standing idle for two straight summers, the commission didn’t reach a decision on the track’s 2013 prospects – though there was general support for it.

“We’re on the way moving forward with having racing in Fargo,” said state Racing Director Winston Satran.

But the Racing Commission – responsible for regulating and funding horse racing at the state’s two tracks, in Fargo and Chippewa Downs in Belcourt – did discuss its own financial situation.

Satran said the commission’s budget was passed by only one legislative vote in 2011. A 2013-14 budget must be passed at next year’s legislative session in order to continue horse racing in the state.

“The Racing Commission could be out of business, and then these people who have made huge investments, all of that, it goes away. We need a clear-cut uniform approach to the Legislature,” Satran said.

The commission generates funds through taxes on live racing as well as account deposit wagering systems. Account deposit wagering is when a person deposits money in an account with a wagering hub operator licensed by the commission. The money in each account is then used to pay for race bets that can be made in person, by telephone or online.

In 2011, about $112 million was wagered through account deposit wagering companies licensed in North Dakota, generating about $380,000 in tax income for the commission.

The Racing Commission can allocate that money to three racing funds: purses, encouraging horse breeding in the state and promotion, which goes toward the operating expenses of races.

Currently, the commission allocates about 20 percent to promotion, but Chairman Jim Ozbon said 100 percent of the funds could go to operation costs in the future, if horsemen request the change.

That could be a big help for racing in Fargo. Wes Heinert, president of Horse Race North Dakota, the nonprofit that runs the Fargo races, has said more cash from the promotion fund would likely allow for a longer run of races than the two weekends this year.

But Heinert also says purse funds and breeder money cannot drop. Purse money is what attracts horsemen to Fargo during the meet, he said.

In Fargo, Satran has estimated a day of racing costs about $20,000. For the 2012 meet, the racing commission contributed $89,000 and wagering companies donated around $75,000 to help host the four days of races – with some of that going toward prize purses.

Although Heinert estimated the track made about $120,000 profit this year, it still owes about $2 million in debt related to the track’s construction – debts the commission can’t help pay.

Satran is also proposing changes to current tax laws that expire in June. Current law requires breakage money – funds generated at the track by lost or non-refunded tickets – be returned to the commission. A proposal discussed Thursday would return breakage funds to the track where they are generated.

Heinert said Thursday that the Fargo track generated about $4,000 in breakage, which was turned back to the state. “Every host track gets to keep their own breakage from live racing,” he said. “We’re unique in that the breakage gets to go to the state.”

The commission will approve and submit its final budget to the 2013 Legislature. Satran said he hopes to have another commission meeting in October to discuss the budget and tax proposals. He said he hopes to have a proposal from HRND for Fargo racing by November.


Readers can reach Forum reporter Wendy Reuer at (701) 241-5530