Pari-mutuel wagering on historic horse races clears second round

Senators amended and advanced a bill from select file March 29 that would authorize the state Racing Commission to license and regulate pari-mutuel wagering on historic horse races.

A historic horse race creates a pari-mutuel pool from wagers placed on a previously held race at a licensed racetrack.

LB806, introduced by Omaha Sen. Scott Lautenbaugh, originally would have allowed instant racing terminals at licensed horse racing premises only with approval from the county board where the licensed facility is located. A general file amendment removed that requirement.

The amended bill would establish a Historic Horse Racing Distribution Fund comprising taxes collected from the races and licensing fees, which would be $1,000 per machine. Half of the fund’s proceeds would be credited to the Racing Commissions Cash Fund to be used by the commission for equitable treatment of equine species and the other half would be directed to the Compulsive Gambler’s Assistance Fund.

Lautenbaugh offered an amendment on select file that he said was intended to address concerns about LB806 raised by opponents during the previous round of debate.

The amendment, adopted 29-0, stipulates that historic horse racing would end if it were found by a court to allow any additional Class III gaming as defined in the federal Indian Gaming Regulatory Act.

The amendment also would terminate authority to license and regulate historic horse racing if specific criteria were not met within four years of continuous use of instant racing terminals, including:
• construction of a race track enclosure in a county that contains a city of the primary class;
• a 25 percent increase in purses compared to 2011; and
• a 30 percent increase in the number of live horse racing days at tracks with instant racing terminals in counties other than Douglas, or a 40 percent increase in Douglas County.

In addition, the amendment clarifies that half of the proceeds credited to the cash fund be used for programs that facilitate equine therapy for youth and veterans and that promote equine and equestrian activities in Nebraska.

Lautenbaugh said the amendment was evidence that he did not have ulterior motives to expand gaming in Nebraska.

“I took the opponents’ concerns at face value,” he said. “This [bill] is about horse racing, plain and simple.”

Sen. Annette Dubas of Fullerton supported the amendment, saying it reaffirmed the narrow focus of the bill on the horse racing industry in Nebraska.

“It’s an amendment that will give this very important industry in our state an opportunity to prove themselves,” she said.

Lincoln Sen. Bill Avery opposed the amendment, saying it did not address the “social pathologies” that accompany gambling, which he said does not produce genuine economic development because it does not produce goods or add value to society.

“This is essentially going to create additional negative economic activity in our state,” he said. “This is not sound public policy.”

A second amendment offered by Lautenbaugh would have eliminated the current exemption on the first $10 million of pari-mutuel wagering profit. He said the amendment was introduced in exchange for withdrawal of a series of amendments offered by opponents to LB806 in an attempt to filibuster the bill.

Opponents withdrew their amendments and Lautenbaugh’s amendment failed on a 2-24 vote.

Senators advanced LB806 from select file 26-18.