North Dakota Poised to Cut Betting Revenue to State

North Dakota lawmakers have passed legislation that will substantially reduce the state's share of revenue from pari-mutuel wagering.

The Senate bill, sponsored by Sen. Joel Heitkamp, puts in place a tiered tax system on handle. The measure has been sent to Gov. John Hoeven for consideration.

The state will get its first major racing facility this year when the North Dakota Horse Park opens for 12 days of live Thoroughbred and mixed-breed racing. The wagering network in the state is controlled by Racing Services under a late-1980s legislative mandate.

For live racing and simulcasting, the licensee, under current law, must deduct up to 20% of total win, place, and show wagers. One-half of 1% goes to purses, one-half of 1% to breed development, and 2% to the state.

Under the bill on the governor's desk, the 2% state share pertains only to handle up to $35.5 million per biennium. For handle above $35.5 million per biennium, the tax drops to one-half of 1%.

For live racing and simulcasting, the licensee, under current law, must deduct up to 25% on wagers that combine two or more horses. One-half of 1% goes to purses, one-half of 1% to a promotional fund for racing, one-half of 1% is used for breed development, and 2.5% goes to the state.

Under the bill on Hoeven's desk, those splits for multiple-horse bets are in place only on the first $102.4 million in handle. The state share drops to one-quarter of 1% on handle in excess of $102.4 million.

About $170 million was wagered in North Dakota in 2001.

The racetrack, now under construction, is part of the plan for the horse park, a multi-purpose facility tied to the North Dakota State University's equine studies program. The foundation will offer racing from Aug. 22-Sept. 14 for Thoroughbreds, Quarter Horses, and other breeds at the facility in Fargo.

The North Dakota Racing Commission has provided $300,000 for purses and another $100,000 in breed incentives for North Dakota-breds. Purses for the inaugural meet will average about $3,000.

The first phase of construction calls for a temporary grandstand, though a permanent structure is part of the second and third phases. The university, which owns 14 acres at the site, has begun construction of a 400-stall barn that will be available for use by racehorses. The horse park will also be used for horse shows, rodeos, clinics, and fairs.

"This is really what we established through the legislation, and it's all being funded and developed by the simulcasting network," Susan Bala, president and chief executive officer of Racing Services, said in a recent interview.

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