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North Dakota Horse Park

Our Gracie, second from the right, pulls ahead to win a race in July 2016 at the North Dakota Horse Park in Fargo.  

Legislation pending in the North Dakota Senate allowing wagers on past horse races could help pay down hefty special assessments that bill backers say threaten the Fargo track’s future.

A Senate committee considered a contentious bill allowing for historic horse racing at simulcast facilities Friday, a month after the House narrowly approved the legislation opposed by many charitable organizations and at least two tribal chairmen. It would allow people to place bets on horse races that have already taken place by including competitor stats but scrubbing identifying information.

Bill proponents have argued it would boost the state’s horse racing industry by setting aside a portion of wagers for funds supporting horse breeders and owners, supplementing purses offered at racetracks, upgrading racetracks and promoting horse racing. They also maintained it would help stabilize revenues amid changes in the gambling field.

But the bill would also dedicate some funds to help satisfy special assessments against the North Dakota Horse Park in Fargo, considered by at least one industry official to be the "backbone" of racing in the state. The track faces more than $4 million in special assessments for completed and pending road and sewer projects, according to a Fargo city official.

“We have been paying the annual payments," said Mike Schmitz, the North Dakota Horse Park's general manager. "Without this, it's going to be tough to make those payments."

Special assessments are imposed by the city to pay for infrastructure improvements, with the cost divided among properties that benefit.

Rep. Craig Headland, R-Montpelier, said the assessments didn't drive him to introduce the bill, but language addressing them was added later. The bill would dedicate the "breakage," or what's rounded off a gambler's winnings, toward the track's special assessments.

"The impetus for the bill was to save the industry itself," Headland said. "If we're going to try to save the industry, we have to have a place for them to race."

The Fargo track is one of two in North Dakota. The other is in Belcourt.

During a three-hour hearing before the Senate Government and Veterans Affairs Committee Friday, bill backers urged lawmakers to preserve the state's horse racing heritage while opponents warned the new gaming type would present unfair competition that could eat into their bottom line. Five states currently offer historical racing, according to the National Thoroughbred Racing Association.

LaRoy Kingsley, the owner of a Bismarck-based advertising, marketing and public relations firm representing the United Tribes Gaming Association, described the gaming devices as slot machines in disguise and said a lack of limits on them could mean "full-scale casinos" would open in major cities.

"In fact, this has the potential to be the most substantial expansion of gaming in the state since tribal gaming in 1993," he said in prepared testimony.

Jon Jorgensen, the gaming manager for Fargo-based ShareHouse, which provides chemical dependency services, said the historic horse racing bill would not mandate that revenue be used for charitable causes, as is the case with other gaming types. He said that could conflict with the state constitution, which limits gambling to the multi-state lottery and charitable gaming.

Casinos are allowed on tribal land in the state through federal law.

The Republican-controlled Legislature has a mixed record on gambling in recent years. Last session, it allowed for electronic pull tabs but rejected a similar historic horse racing bill and a proposed constitutional amendment opening the door to off-reservation casinos.

Last week, the House approved a sports betting bill that the Senate Government and Veterans Affairs Committee will consider Thursday.

The committee did not take immediate action on the historic horse racing bill Friday.

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