Off-track betting restrictions limit Minnesota horse racing wagers during pandemic

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When it comes to wagering on horse races, Jay Lietzau is a numbers guy. An accountant by trade, he calculates his odds of winning with a stats sheet in one hand, and a face mask in the other.

In the midst of the COVID-19 pandemic, Lietzau is part of a much smaller group of bettors in the stands at Canterbury Park in Shakopee. Minnesota’s largest horse racing track opened with COVID-19 protocols and restrictions in June that resulted in crowds that are a fraction of their typical size.

The fans in the stands are in a unique position: They are the only people in the state that can wager on Minnesota races, because of a little-known, decades-old law that bans off-track betting on local horse racing.

"The fact that I live 20 minutes from (Canterbury) and not be able to bet is frustrating," Lietzau said. "To me, it seems like it should be a no-brainer."

While the global pandemic has limited how many fans can actually go to the track, the demand for betting on horse racing has continued to grow. 5 INVESTIGATES reviewed state filings from the Minnesota Racing Commission and found a 93 percent increase in off-track wagering at the height of the pandemic.

State records from Minnesota’s Racing Commission show off-track wagering on races outside of Minnesota jumped significantly as the pandemic took hold. These numbers represent the total amount of Advance Deposit Wagers collected by third-party companies month to month. In April, Minnesota saw a 93 percent increase in ADW betting by its residents from the same period the previous year.

Steve May, executive director with the Minnesota Racing Commission, said when other sports stopped, horse racing took off as one of the few sporting events left to consistently bet on during the pandemic.

"Wagering has been through the roof to be honest," May said.

State records show Minnesotans spent more than $4.3 million in April on off-track wagering on races outside of Minnesota. That practice, according to state law, is legal.

"A Minnesota resident can bet on Florida races, but they can’t bet on Minnesota races? Doesn’t make sense," said longtime Canterbury trainer Bernell Rhone. "We’re discriminating a little bit. It should be for all."

Restrictions on off-track betting on races run in Minnesota are making it more difficult for tracks here to tap into the increased demand and financially navigate the uncertainty that comes with the virus, according to Andrew Offerman, vice president of racing operations at Canterbury.

"Obviously would have been a significant impact to our daily handle to have people within the state of Minnesota and out of our regular fans be able to participate from home," Offerman said.

The state captures a small percentage of money from off-track wagers, May said, and uses it to cover the track’s regulatory costs. He said that when people bet on live racing in person, the tracks ultimately get a larger portion of that bet.

"Under the circumstances, we have something to offer the race fans in Minnesota," May said.

But because of the crowd limitations, Offerman argues any supplemental stream of income is going to make a difference, due, in part, to the lack of other revenue sources from concessions and special events that have been eliminated by the pandemic.

"When there is not 6,000 people here a day, that’s a lot of lost admission revenue and a lot of lost food and beverage revenue for us," he said.

A complicated history

Off-track betting has been a hotly-debated issue in Minnesota for more than three decades.

The law that passed in 1983 was intended to put a stop to illicit gambling operations and to drive fans to Canterbury in its early years of operation.

Rhone has raced horses at Canterbury since its opening in 1985. At that time, he said, telephone wagering was just starting to gain traction in other parts of the country and people in the industry wanted fans to support the track by showing up.

"In its day, that made sense," Rhone said.

In an effort to expand racing’s reach in Minnesota, state lawmakers legalized off-track wagering in 1991. The following year, the state supreme court declared the law as unconstitutional.

Click through the photo gallery to see photos of Canterbury Park during its opening as well as newspaper articles reporting on off-track betting:

But as online wagering started to gain popularity among horse racing fans, the law never changed.

The global pandemic has sparked a renewed interest in revising the statute, but those efforts fell flat during the final days of the 2020 legislative session.

State Representative Brad Tabke (DFL-Shakopee) introduced a bill that would have temporarily permitted Minnesota residents to wager off-track on Minnesota races. The measure was part of a larger piece of legislation aimed at financially supporting the horse racing industry during the pandemic.

But Tabke removed the off-track language from his own bill before it went to committee, citing strong opposition.

"It was a bridge too far as an expansion of gambling for the Minnesota Indian Gaming Association," Tabke told lawmakers during a hearing.

MIGA represents the state’s tribes on gaming and other public policy matters. Repeated requests to interview a representative from the organization went unanswered.

On its website, MIGA describes its opposition to any off-reservation gambling, citing a concern over the precedent it would set and the impacts that would have on the tribes.

"With decreased gaming revenue due to more gaming outlets, tribes would be unable to sustain the progress being made for their people and communities," the website states.

An uncertain future

Before the sun even rises, the backstretch at Canterbury is a flurry of activity. Rhone is up before dawn, directing workers in his stable to feed, bathe and exercise horses. He works all morning, takes an early afternoon break, before returning to the barn to prepare half a dozen horses that race most nights.

New COVID protocols have limited who has access to these restricted areas. Rhone said many of his local owners, who are older, do not want to take the health risk of coming to the track to watch their horses run.

Rhone worries that limits on off-track wagering, combined with restrictions put in place because of the pandemic, could result in long-lasting and devastating consequences for a sport he’s spent his life promoting.

"We’re trying to do whatever we can do to revitalize it and a few little changes would really make a world of difference," Rhone said. "Times have changed. Rules need to change."

Kirsten Swanson can be reached by phone at 651-642-4406 or by email here.