House Bill 1251 would have allowed the state Gaming Commission to license out-of-state simulcast betting hubs for in-state horse races.
It would have allowed the Commission to collect 5% of gross receipts from the licensees. It would have made it possible for South Dakota residents to place their bets on races, even if they couldn’t make it to the physical track themselves.
It would have, if it wasn’t killed on the Senate floor three weeks ago.
The bill didn’t die easy; 15 yeas to 19 nays, but still it died. The March 29 passage of Senate Bill 128 — which provides the Gaming Commission $120,000 earmarked for horse racing — offers a slim ray of hope, but racing industry officials say the future of the sport in South Dakota is still uncertain.
“[SB 128] was originally for $600,000, and that would have allowed both tracks [in Aberdeen and Fort Pierre] to function in 2019 and 2020,” Shane Kramme said.
Kramme is on the board of directors for the Verendrye Benevolent Association, the body that manages horse racing in Fort Pierre, and he has some harsh words for the legislators that whittled SB 128 down to its current $120,000.
“They knew full well that this is not enough money,” he said.
Until Friday, Kramme and other racing officials weren’t sure if there would be any money at all. Governor Noem waited until almost the last possible day — March 27 — to sign SB 128, and without knowing whether or where they would get funding, Kramme and the rest of the VBA board decided to cancel races in Fort Pierre in 2019.
It was a decision Kramme called “indescribably difficult,” but one that he said the board “will not reconsider.”
More discouragingly, Kramme said, is that this string of defeats and compromises bodes poorly for the state of horse racing in South Dakota beyond 2020.
“It’s a signal sent to horsemen in South Dakota… they’re going to move on,” he said.
Move on, specifically, to states like Iowa, Minnesota and Wyoming, where he said horse breeders have more incentives to foal in their pastures and racers have seen a healthier industry for competition and investment.
True enough — in 2017 Wyoming offered about $1.7 million in incentives to breeders, and the Paulick Report found that the Iowa Thoroughbred Breeders and Owners Association is currently offering up to $20,000 for any mare that foals in the state in 2019. No such incentives exist in South Dakota.
Outside Fort Pierre, Robert “Bubby” Harr of Northeast Area Horse Racing said he remains “cautiously optimistic” that races will be held at the Aberdeen track this year, but won’t know for sure until the organization’s council makes a decision this weekend. He too is anxious for the future.
“[HB 1251’s defeat] was disappointing because we thought we had a solution to please everyone… other states are already using this resource,” he said. “Now we have to go back and find a whole new solution,”
Racing problems in South Dakota are nothing new, he said. They go back to former Governor Bill Janklow, who he accused of defunding the industry in the late 90s and early aughts. The advent of online and video gambling didn’t help much either, and now with the Fort Pierre races called off for the first time in 70 years, he said he’s feeling the isolation.
“The tracks in Fort Pierre and Aberdeen, they need each other to make a complete circuit,” Harr said.
Opponents of the bills said they voted against it for a number of reasons. Nationally, horse racing is falling out of public grace. It is not as profitable as any of the “ball” sports, not as accessible as other forms of gambling, and perennially plagued by scandals of cheating jockeys, drugged horses, abusive trainers; moral failings that have played across national media since the 1970s.
But the biggest problem opponents had with the bills were taxes. State Revenue Deputy Secretary David Wiest argued that HB 1251 would effectively add a new tax to state law in its 5% collection of hub receipts.
Wiest said those funds wouldn’t meet any public good. “Where do the tax dollars go?” he asked. “Do they go to the general fund? No. Do they go to education? No… Theses new taxes would be used to subsidize the horse racing industry, an industry that nationwide is on the decline.”