Legislative Auditor’s report finds purse problems at Running Aces horse track

A report on the Running Aces harness racing horse track from the Minnesota Legislative Auditor’s office indicates there have been problems and violation of state law at the track regarding purse contributions — the amount the track contributes to the pot for paying owners of winning horses.

The report, issued today (PDF) summarizes the findings:

  • The Minnesota Racing Commission failed to adequately oversee purse
    contributions at Running Aces, which allowed a serious dispute to arise and remain unresolved for a significant period of time.
  • Purse contributions made by Running Aces from betting on live races at Running Aces from 2008 through 2012 were not in compliance with Minnesota law.
  • Purse contributions made by Running Aces from betting on simulcast
    races that occur during “the time period of live races” from 2008 through 2012 were not in compliance with state law.
  • Purse contributions made by Running Aces from 2008 through 2012 were deficient by $436,865.

The Running Aces track, which also has a card room for poker poker and blackjack, is located north of the Twin Cities in Columbus, near Forest Lake. It opened in 2008.

Track officials say state law is confusing on some of the issues, and that they  have made up the difference in purses in an agreement with the horse owners.

Among the findings, the report says that the nine-member Minnesota Racing Commission, appointed by the governor to ensure the integrity of horse racing in the state, at Canterbury Park and Running Aces:

“… failed for approximately five years to adequately oversee purse contributions at Running Aces, a significant dispute developed. The commission allowed its deputy executive director to decide whether Running Aces was complying with state law without review and action by the commission.”

The report’s recommendation:

The Minnesota Racing Commission should promptly institute a negotiation process that will result in resolution of the Running Aces purse contribution dispute. The resolution should include a reasonable payment by Running Aces for past underpayments of purse contributions, and the final result of the negotiations should be approved by a majority vote of the commission.

Responses to the report:

From the Minnesota Racing Commission:

“The MRC played an active role in late 2013 to resolve this dispute. The MRC recognized the importance of ongoing collaboration between the horsemen and the track and thus encouraged a settlement on terms acceptable to MRC. At the Commission’s direction, the Executive Director spent December and January, prior to requesting OLA’s involvement, urging counsel for both sides to reach a reasonable resolution that could be approved by the Commission. MRC consulted with counsel from the Attorney General’s office on the nature and extent of its legal authority and, in particular, on how a remedy could be fashioned that benefitted those who had been underpaid by the purse shortfall. In sum, the MRC did everything but invoke the authority noted in the Report to “enforce all laws and rules governing horse racing.”

From Running Aces:

“As soon as we were made aware of this concern in May of 2013 we made an agreement to re-calculate the formula with our horsemen. Running Aces made a payment in February 2014 of $100,000, the net difference between the handle and the take. We continue to work proactively with the Minnesota Racing Commission, the legislature and others to ensure the best environment for racing in Minnesota. As the Legislative Auditor states, the law needs clarifying by the legislature.  ”

From the horse owners group, Minnesota Harness Racing, Inc.:

“…, if the Minnesota Racing Commission will not order an amount due from Running Aces, then MHRI agrees with the OLA’s recommendation that the Commission institute and control a negotiation process which involves both Running Aces and MHRI. Any resolution to this issue must include MHRI as its members have been directly affected by purse contributions which were not in compliance with state law.”

State Rep. Joe Atkins,  a DFLer from Inver Grove Heights who chairs the House Commerce Committee:

“I and other members of the House Commerce Committee from both sides of the aisle have been raising serious questions about Running Aces’ operations for some time. We appreciate the thoroughness of Auditor Nobles’ report. We will be taking a deeper look at this audit at a hearing of the House Commerce Committee on July 22nd, where we will discuss steps to prevent this from happening again and to ensure there is absolute integrity and honesty in Minnesota racing.”

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Comments (1)

  1. Submitted by jason myron on 07/08/2014 - 12:42 pm.

    Everyone

    up in that neck of the woods knows that harness racing was never the prime motivation for building that facility. It was a calculated gamble by the original investors that it would become a racino shortly after construction. Had they not been granted the license to run a card room, that place would be holding flea markets and car shows on weekends.

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