Lawmakers Hold Hearing Tuesday on Alleged Payment Problems at Running Aces

Updated: 07/22/2014 9:13 AM

Photo: Photo: KSTP/File

A state audit has concluded that operators of a Minnesota horse racing track shorted race purses by nearly $437,000 over four years in which regulators failed to adequately scrutinize the payouts.

State lawmakers will meet Tuesday, July 22, to hear from all sides.
Minnesota's legislative auditor released his special review of the Racing Commission's oversight of the Running Aces Harness Track north of the Twin Cities. It says regulators took years to notice the track improperly calculated amounts that should go into purses for winning horse owners. Auditor James Nobles says payments to bettors weren't at issue.
The commission is under new management after some turbulent years. Its new leaders promise to promptly seek to recover deficient payments.
In a response attached to the audit, the track's general manager says he believes purses were already sufficiently adjusted to account for past deficiencies. The audit says Running Aces didn't pay its horsemen correctly.

In horse racing, the "handle" is the total amount of money wagered, or all of the money bet on a horse race. The "take out" is only the percentage of the that.

State law says horsemen are supposed to get 8.4 percent of the "handle", or total. But at Running Aces, horsemen were to only get that 8.4-percent from the "takeout." For nearly five years, Running Aces horsemen were not getting the money they were entitled to.

And according to a new legislative audit, leaders of the 2008-2013 Racing Commission staff were giving Running Aces the OK to do so.

"This dispute should never have occurred, if the racing commission in the past had been doing its job," said Jim Nobles, the Legislative Auditor.

In all, the horsemen missed out on nearly a half-million dollars.

"We always thought we were operating within the law, but the law wasn't clear," said Bloise Olson, a spokesperson for Running Aces. In response to the audit, Olson said running aces has already paid the horsemen back. "We did that last February, the horsemen were satisfied," said Olson.

But it's not over.

The House Commerce Committee is meeting to talk about steps to prevent this from happening again.

There's a possibility state statute could change.

"It appears that the law is very clear on the live racing and on how much was owed," said Minn. Rep. Joe Atkins.

The legislative auditor, who's checking and balancing it all, says in the end it's up to the racing commission to decide what's fair, or not.

In the last eight months there's been major turnover on the nine-member commission, a group whose job it is to ensure the integrity of horse racing in the state.

"It's important because number one, this is Minnesota and we believe in honesty and integrity. Second, is we want to make sure the harness track succeeds," Rep. Atkins said.

The Associated Press contributed to this report.