North Dakota Seeks to Rejuvenate Live Horse Racing

Submitted by
on January 17, 2013

Officials of the North Dakota Racing Commission are lobbying for the Legislature to approve tax incentives to lure high-stakes horse racing gamblers back to the state, many of whom left almost a decade ago as a result of a federal investigation into the gambling industry. The plan would limit taxes charged on companies providing major betting services, with the aim of generating more money to promote live racing at North Dakota’s two horse racing tracks through revenues from wagering.

Should the amendment be approved it will cap the tax on pari-mutuel service providers at $400,000 for the first year, with a five percent increase in each subsequent year. This would be of huge benefit to some North Dakota wagering service providers, one of which reportedly expects to do $300 million in account deposit wagering per annum.

The New York Racing Association is said to be considering establishing its own account-wagering operation in North Dakota. Currently facilitating betting at Saratoga Springs, Belmont Park and Aqueduct, the NYRA would benefit from substantial tax savings in North Dakota, or another state with lower tax rates. This may enable it to lower fees for top bettors, thereby generating more business and more taxable revenue for the state in which its operations are based.

North Dakota’s racing director, Winston Satran, noted that in 2012 around $152 million was wagered through the state’s licensed account deposit wagering companies. This could be significantly increased if the proposed amendments are approved.

The proposed amendments also address the use of money resulting from unclaimed tickets and breakage – the money left over when bets are rounded down to the nearest twenty cents. Currently the money is divided between the breeders’ fund, purse fund and promotion fund, but it is now proposed that it should all go toward the promotion fund which pays for the daily operation of the races. This may enable North Dakota to host more days of racing, helping to rejuvenate the sport in the state.

Located in Fargo, the North Dakota Horse Park is planning three 3-day racing weekends for summer 2013 – an improvement on the two weekends of racing hosted in 2012 – but much depends on funding. The North Dakota Horse Park has the capacity to stable four hundred horses and is home to the University’s equine sciences department, but had been closed for two years as a result of being unable to meet its debt.

Andrew G Maragos, Republican member of the North Dakota House of Representatives and a member of the racing commission noted that the state is “back on solid footing now”, adding that it needs to be nurtured, allowed to grow and “find its own level”.

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