Purpose

• The bill aims to reform how advance deposit wagering (ADW) is defined and how money from ADW is collected and used in Minnesota’s horse racing industry. It seeks to improve purses (prizes), support breeding, and ensure the industry is adequately regulated to protect participants.

Key Definitions

• Advance deposit wagering (ADW): A wager placed through an advance deposit wagering provider on a horse race conducted outside Minnesota.

Main Provisions

• Definition change for ADW

  • ADW is defined as a wager made through an ADW provider on a horse race that is held outside the state.

• Source market fees and how they are used

  • Source market fees: Fees paid by ADW activity are to be set by contract and are in addition to other fees (such as host fees).
  • Distribution by racetrack type:
  • 28% of source market fees go to the licensed racetrack that primarily conducts standardbred racing.
  • 72% go to the licensed racetrack that primarily conducts Thoroughbred and Quarter Horse racing.
  • Allocation for races conducted outside Minnesota:
  • At least 50% of the total source market fees received by a licensed racetrack for out-of-state races must be set aside for breeders awards and purses.
  • Of the amount set aside for out-of-state races:
    • At least 33% must be paid by the racetrack to the state for deposit to the breeders fund and used only for breeders awards as defined by law.
    • The remaining portion must be paid to purse accounts for races held at the racetrack under agreements with the horsepersons associations representing the majority of the breed racing at that track.
  • Allocation for races conducted within Minnesota:
  • At least 50% of the total source market fees received by a licensed racetrack for in-state races must be set aside for purses and paid to purse accounts for races at the racetrack under agreements with the horsepersons associations representing the majority of the breed racing there.
  • License status requirements:
  • No source market fees may be paid to a licensed racetrack whose license has been revoked or not renewed.
  • If a racetrack’s license is revoked or not renewed, those fees otherwise payable to that racetrack shall be paid to another licensed racetrack.

Changes to Existing Law

• Redefined scope of ADW

  • The bill narrows ADW to wagers placed through an ADW provider on out-of-state races, changing how ADW activity is categorized under Minnesota law.

• Reallocation of funds from ADW

  • The bill shifts how ADW proceeds and source market fees are distributed, tying a portion of out-of-state and in-state ADW revenue directly to breeding funds, breeder awards, and purses, rather than leaving those funds more loosely defined.

• Protection of participants and regulatory funding

  • By directing a portion of funds to the breeders fund and breeders awards, the bill aims to bolster breeding programs and ensure ongoing regulatory funding and industry protections.

• Licensing and revenue flow safeguards

  • The bill adds protections ensuring that license status affects fee payments (fees go to another track if a track’s license is revoked or not renewed), reinforcing accountability among licensed racetracks.

Potential Implications (plain-language)

• Funding for Breeders and Purses

  • More ADW money is earmarked for breeders awards, breeders funds, and track purses, potentially increasing financial support for breeders and races.

• Track Funding Alignment

  • The two main types of tracks (standardbred vs Thoroughbred/Quarter Horse) share ADW revenue differently, reflecting the bifurcated racing landscape.

• In-state vs Out-of-state Racing

  • The bill creates distinct rules for money tied to races conducted inside Minnesota versus outside Minnesota.

• Licensing Accountability

  • If a track loses its license, it stops receiving ADW source market fees, with money redirected to other licensed tracks.

Summary of Key Impacts

• Purpose-driven shift of ADW funds toward breeding, purses, and regulatory funding.
• Clear, percentage-based distribution of source market fees between track types and between in-state and out-of-state races.
• Stronger protections tied to license status to ensure funds go to currently operating, licensed tracks.

Relevant Terms - Advance deposit wagering (ADW) - ADW provider - Source market fees - Breeders fund - Breeders awards - Purses - Standardbred - Thoroughbred - Quarter Horse - Licensed racetrack - Class A licensee - Class B licensee - Races conducted outside the state - Races conducted within the state - Horsepersons associations - Breeders awards per Minnesota law - Regulation and participant protection