Another ND gambling bill flies under the radar

North Dakota’s Legislature is doing its best to expand gambling and, possibly, punch the state’s charitable gaming in the gut. We hope the latter is an unintended consequence, but with this group of lawmakers you can never be sure.

You know about Rep. Al Carlson’s last-second proposal to build state-owned casinos. While it seems obvious Angry Al’s goal is to teach those uppity Native Americans a lesson for protesting the Dakota Access Pipeline by removing their monopoly on casino gambling, a side effect of this ill-considered idea would likely be a reduction in charitable gaming and the proceeds that come from it. It’s logical to believe if gambling Fargoans have the option to drive 15 minutes to a casino that allows cigarettes and booze, they’ll spend less money playing blackjack or pull tabs at their favorite bar.

Flying under the radar is Senate Bill 2221, which would allow something called historic horse racing to be played at up to 10 locations in the state. It sounds interesting and innocent enough, but a little digging reveals it to be an oddball piece of legislation meant to benefit mostly the horse-racing industry in North Dakota. Charitable gaming and the charities they serve — like Sharehouse, the Boys and Girls Club of the Red River Valley and hundreds of others — again might pay the price.

Historic horse race betting, also known as “instant racing,” lets players use a slot machine-like device to bet on tens of thousands of horse races that have already been run. Bettors aren’t allowed to know the locations, dates and names of the horses — although they may be provided some limited information to place their bets. Interesting note, though: If players want to forgo making choices on which horses to bet on, that’s an option. They can choose to have the machine make their selections for them.

If betting on random old horse races with limited or no information seems odd, that’s because it is. But there’s a reason for it: It allows this type of gambling to be classified as pari-mutuel betting instead of casino gambling and therefore fall under the auspices of the state’s horse racing commission instead of the attorney general. This, then, would allow the bulk of the proceeds to go toward the horse racing industry instead of charities or the general fund. Funds from SB 2221 would specifically be earmarked for the racing promotion, purse and breeders’ funds of the horse racing commission.

Historic horse racing is active in only a handful of states and some — Wyoming, Arkansas and Kentucky, for example — have used it to prop up failing live racing. There is also a common theme in every state that’s allowed historic horse racing: legal problems.

The issue is whether or not the machines required skill or were games of chance, the latter of which are illegal in most states. While horse racing advocates say the machines require bettors to use knowledge and skill to win against a pool of other players, courts have said otherwise.

Wyoming, for example, first allowed historic horse racing machines in 2003, but they were outlawed in 2006 when the state Supreme Court said the machines were “a slot machine that attempts to mimic traditional pari-mutuel betting.” The same question has arisen in other states. Wyoming tweaked its machines and historic horse racing is back. Money is being funneled to its horse racing industry.

The amount of money expected to be bet is not small. The fiscal note provided to the Legislature says there is an expectation of $100 million being bet annually on historic horse racing in 2018, jumping to $250 million in 2019 and leveling off at $200 million thereafter. This is what has charitable gaming nervous. It’s estimated gamblers wager about $300 million a year at more than 300 charitable gaming sites statewide. Advocates believe that number will dip if historic horse racing is legalized.

The question for North Dakota legislators is whether this is a wise way to expand gambling in a big way. The main recipient will be the horse racing industry. Charitable gaming will likely suffer. Is this a good trade-off? Legislators have rejected historic horse racing in previous years. Will they do so again?

Readers can reach Forum columnist Mike McFeely at (701) 241-5215

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