Amidst Sports Betting Debate, Minnesota Racetrack Sues Tribes

Written By Mike Breen on April 23, 2024 - Last Updated on April 25, 2024
A picture of a judge's gavel for a story about a lawsuit filed by a Minnesota racetrack against three tribes.

The rift between Minnesota horse racetracks and the state’s tribal communities over gambling issues has deepened with this year’s effort to legalize sports betting.

The latest chapter in the rift comes via a federal lawsuit filed by Running Aces Casino, Hotel & Racetrack against three tribal casinos.

Running Aces claims the casinos have offered card games beyond blackjack, some of which are offered at the racetrack’s cardroom. The suit submits that tribal gaming compacts do not allow those non-blackjack games.

The lawsuit comes amid contentious wrangling between the state’s two racetracks and legislators, who’ve been working to pass a sports betting bill in the current legislative session.

Minnesota bills do not allow racetracks to offer sports betting

Due to financial struggles, Minnesota’s racetracks have been looking for additional revenue streams. The tracks were hopeful that Minnesota sports betting legislation would allow them to offer retail betting. But, so far, the leading bills in the House and Senate give the state’s tribes exclusivity over sports betting.

Rep. Zack Stephenson’s proposed bill, House File 2000, allows some tax revenue from sports betting to go into a fund for the tracks. But since the legislation doesn’t allow the tracks to run sportsbooks, they tried to expand their revenue through other means.

Earlier this month, the Minnesota Racing Commission voted to allow Historical Horse Racing machines at the tracks beginning May 21. The tracks said this was a financial lifeline.

However, Stephenson and other lawmakers said this move was illegal. They claim HHR machines would only be legal if they were at tribal casinos.

Lawsuit claims illegal card games hurt track’s business

Running Aces’ lawsuit states that the Grand Casino Hinckley and Grand Casino Mille Lacs, owned by the Mille Lacs Band of Ojibwe, and Treasure Island Resort & Casino, owned by the Prairie Island Indian Community, have violated the federal Racketeer Influenced and Corrupt Organizations Act, also known as RICO.

They filed the lawsuit late last week with the US District Court of Minnesota. It claims tribes have systematically attempted to block the tracks from expanding their gambling offerings. The suit cites Running Aces’ requests to expand its “dealer-assist” table games and the lack of concessions in sports betting legislation.

Tribal casinos have also illegally expanded their own offerings “in blatant disregard of clear criminal prohibitions,” according to the suit.

Running Aces claims the two Mille Lacs Band casinos offer “Class III” card games currently prohibited under tribal gaming compacts. For example, the track claims the tribes spread Three Card Poker and Ultimate Texas Hold ‘Em.

The suit says Treasure Island was offering those types of games prior to Prairie Island’s compact being amended to include them last year.

Running Aces claims the tribes offering these card games have hurt its business, according to the lawsuit.

“These RICO violations have given defendants’ casinos illegal and unfair competitive advantages over Running Aces. By offering Class III card games other than blackjack, defendants’ casinos have been able to attract many patrons who would otherwise have played card games at Running Aces, thereby depriving Running Aces of substantial revenue and profits – both from lost card gaming and from lost accompanying spending on food, lodging and live entertainment.”

RICO lawsuit is in response to HHR pushback, Running Aces president says

In an April 17 Star Tribune op-ed, Running Aces President and Chief Executive Taro Ito pointed out that the tribes have filed a lawsuit to overturn the commission’s decision to allow HHR machines.

Ito said Running Aces’ lawsuit is a direct response to the pushback they’ve faced regarding HHR machines.

“Running Aces has followed the rules, applied and received approval for a new pari-mutuel product that will assist in remaining a viable business. In return, we find ourselves defending … lawsuits brought on by a tribal casino and fighting legislators to merely have our day in court. Simply stated, our recent actions in federal court are merely a reaction to the events described above. All we ask is to be treated fairly. Minnesota deserves better.”

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Mike Breen

As a contributor to PlayMinnesota, Mike Breen covers most angles of the state's gambling industry. Currently, he is focusing on the state's legislative progress surrounding sports betting bills. However, he can be found writing about many aspects of Minnesota gaming.

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