A Minnesota Senator
has introduced new legislation to legalise advanced deposit wagering (ADW) in
the state, allowing it boost funding for its horse racing industry and channel
players towards a legal offering.
Senator Dan Sparks’
SF2835 aims to amend Chapter 240 of the Minnesota Statutes to give the
Minnesota Racing Commission the power to licence and regulate ADW companies in
the state. The bill was introduced last month and has now been referred to
the Senate Finance Committee.
The bill looks to
ensure ADW providers allocate a fair share of revenue to the state’s horse
racing and breeding industries, as well as providing a level of consumer
protection to Minnesota residents that bet with these companies.
“Due to the
non-regulation of advance deposit wagering companies, Minnesota's horse racing
industry has lost revenue as Minnesota residents are increasingly drawn to
these wagering platforms for their convenience and their ability to offer
attractive promotions and rebates, mostly from savings derived from not having
to provide much needed revenues to the Minnesota Racing Commission and the
state's racing industry,” the bill explains.
“As in many states
that have licensed and regulated advance deposit wagering companies, enacting
this legislation will allow Minnesota's racing industry to recapture lost
revenues derived from wagering currently being conducted by Minnesota residents
and ensure such wagering benefits Minnesota's racing industry.”
This would effectively
allow online and phone betting in the state, with advanced deposit wagering
allowing customers to place bets via pre-funded accounts.
Companies can apply
for a Class C licence to provide ADW on horse racing for a fee of $10,000 per
year, with licensees required to pay a $1m bond to the state of Minnesota to
ensure payment of all fees such as source market fees, regulatory fees and
breeders fund fees.
Applicants must also
set out a plan of operation for conducting ADW in the state, including dispute
resolution methods, procedures to verify account holders’ identities, and
annually contracting a third party to conduct an audit, with its results to be
submitted to the Minnesota Racing Commission.
To ensure the state’s
horse racing industry is funded by the new form of betting, operators will be
required to pay source fees to licensed racetracks. These fees will be set by
contract or by the Racing Commission and are in addition to other fees.
Of the sum, 28 per
cent will be given to a licensed racetrack that primarily conducts standardbred
horse racing, with 72 per cent going to tracks that conduct thoroughbred and
quarter horse racing.
ADW providers must
also pay a regulatory fee at a rate of 1 per cent of all amounts wagered, with
a further sum of one quarter of 1 per cent of all amounts wagered to be imposed
as a breeders fund fee. Taxes of 6 per cent on all revenue over $12m generated
through ADW will also be enforced.
Any violation of the
legislation will see companies fined or have their licences revoked, though
operators are given leave to appeal against fines over $5,000.
Should the legislation
pass into law it will come into force from July 1st.