New Minnesota Law Authorizes Account Wagering

Minnesota officials said advance deposit wagering legislation passed recently by lawmakers will provide an estimated $1.5 million in revenue that will be "recaptured" from ADW providers and redirected to horse racing and breeding in the state.

The bill was signed into law by Gov. Mark Dayton May 31. Most of the provisions take effect July 1.

"The new law will provide fresh economic stimulus to the state's racing and breeding industry, which, in turn, will encourage further expansion of this significant industry in the State of Minnesota," Minnesota Racing Commission chairman Ralph Strangis said in a June 8 release. "The new law will provide incentives for additional jobs and millions of dollars of direct and indirect economic impact. This is an economic development initiative that will help ensure the long-term health of the Minnesota racing industry."

The law calls for the typical ADW provider to pay an initial license fee of $10,000, and fee of $2,500 per year thereafter. It also mandates source-market fees that must be paid to the state's two tracks—Canterbury Park and Running Aces, a harness track.

The document states that source-market fees "shall be established by contract and are in addition to other contractual fees such as host fees. The two Minnesota tracks must pay any source-market fees they receive from ADW providers in the following manner: 72% to the licensed Thoroughbred and Quarter Horse track, in this case Canterbury; and 28% to the licensed Standardbred track.

Based on those percentages, at least 50% must be set aside for purses and breeders' awards. Of that mount, 33% must be paid by the racetrack to the state for deposit into the breeders' fund, and the rest deposited into purse accounts and divvied up according to horsemen's contracts.

The law also imposes a "regulatory fee" of 1% of all money bet by Minnesota residents through ADW systems, and a one-quarter of 1% fee to support breeders' funds.

"Every additional Thoroughbred, Quarter Horse, or Standardbred that is bred, foaled, raised, raced, and retired in Minnesota has an impact on Minnesota's agricultural economy," Minnesota Throughbred Association president Jay Dailey said. "Every stallion, mare, and foal needs feed, bedding, veterinary care, farriers, barns, fencing, tack, farm equipment, trucks, trailers, and people to provide care for these equine athletes. New revenues from ADW will go right back into Minnesota's agricultural economy."

The law contains provisions for fines and states any money paid to the commission through fines will be deposited in the state treasury, credited to the two tracks, and then re-appropriated to them to support "racehorse adoption, retirement, and repurposing."

Officials said the ADW legislation was pushed by the MRC with industry and bipartisan legislative support.

Canterbury has a 10-year, $75 million purse and marketing arrangement with the Shakopee Mdewakanton Sioux Community, which owns the nearby Mystic Lake Hotel & Casino. Average daily purses have almost doubled so far, and this year Canterbury lowered pari-mutuel takeout rates across the board to a low of 15% and a high of 18%.