Check out horse races (copy)

The Nebraska Attorney General’s Office said the Nebraska Racing Commission violated the state’s open meetings laws at its Oct. 29 meeting, where it voted to allow historical horse race betting.

LINCOLN — The state’s top lawyer has lassoed, at least for now, an attempt by an obscure state board to allow betting on historical horse races — a wagering option that was rejected by a former governor and in court.

The attempt was labeled as a sneaky way to approve slot machines by one anti-gambling advocate, but was defended by others as an effort to allow a form of wagering that’s been deemed legal in other states.

In October, the Nebraska Racing Commission voted unanimously to allow Fonner Park in Grand Island to install historical horse racing terminals produced by a Maryland company.

But the machines never got out of the starting gate after the Nebraska Attorney General’s Office, in a Nov. 15 letter to the commission, said the five-member board had violated the state’s open meetings laws at its Oct. 29 meeting.

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The commission was advised to rescind its action and schedule another meeting to “cure” the defective meeting. In addition, the Attorney General’s Office advised the board that it doesn’t have the authority to approve wagering on previously run races, because it would be a new form of pari-mutuel gambling.

In historical horse racing, the identities of the horses and riders are changed to guard against bettors recalling the outcomes of old races.

The dispute has prompted the Racing Commission to reschedule consideration of the issue at its Jan. 16 meeting in Grand Island.

Dennis Lee, an Omaha attorney who chairs the Racing Commission, said a presentation by the makers of the historical horse racing machines at the October meeting convinced him, as well as other members of the commission, that their machines met the definition of a legal, pari-mutuel betting device.

“The attorney general had a different point of view that we respect,” Lee said.

Bruce Swihart, the CEO of Fonner Park, said the racetrack has always considered the historical racing terminals to be legal, and not an expansion of gambling, and is hoping the commission gives a second OK to install them at the January meeting.

“I don’t see why not,” Swihart said.

Pat Loontjer, who heads Gambling With The Good Life, a leading anti-gambling group, said she was shocked when she heard that the Racing Commission had approved the gambling devices.

“Who in the heck do they think they are? We’ve fought this for 24 years, and they think they can change the (state) constitution?” Loontjer said.

The episode is the latest chapter in a long-running effort by horse racing interests to expand gambling — and increase revenue — at the state’s struggling thoroughbred horse racing tracks. It comes just after the state’s thoroughbred owners and breeders announced that they will try to place an issue on the 2020 ballot to allow casino games at the state’s racetracks.

But betting on the historical horse races, if approved by the Racing Commission, would happen much sooner, reversing a long losing streak for the issue.

The State Legislature, in 2012, voted to allow betting on previously recorded, or “historical” horse races. But the bill was vetoed by then-Gov. Dave Heineman, who said it would violate the state’s constitutional limits on gambling.

Then, in 2014, the Legislature OK’d a proposed constitutional amendment to authorize wagering on historical horse races, if approved by the state’s voters. But the State Supreme Court tossed the issue off the ballot.

In October, the Racing Commission held a public hearing on a request by Fonner Park for “an additional pari-mutuel wager.” No one testified against the proposal, and the commission heard a lengthy presentation from PariMAX, a subsidiary of AmTote, which provides wagering kiosks for thoroughbred racetracks.

The PariMAX terminals, which the company says are in use in Kentucky, Wyoming, Alabama and Oregon, allow players to wager on historical races much like they would live races, based on the past performance of the horses involved. The machines, according to the PariMAX website, are “highly regulated, proven, vetted and audited ...”

Prior to the October meeting, a Kentucky judge had ruled that the PariMAX machines met the definition of legal pari-mutuel betting in that state.

Lee told The World-Herald after the October meeting that the terminals were “creating a new wager within the scope of pari-mutuel wagering.”

But the Attorney General’s Office, in a 13-page letter signed by Attorney General Doug Peterson, disagreed.

It said that Nebraska’s statutes on pari-mutuel wagering, as well as past court rulings, are much different from those in Kentucky, where a judge found the historical horse racing terminals legal. Only wagering on live races, or those simulcast live from other racetracks, is allowed under Nebraska law, the attorney general argued.

The letter also cited several defects in the commission’s October meeting, including that the board didn’t have authority to allow some commissioners to participate via telephone. The attorney general also said the racing board had mislabeled the agenda item about historical horse racing so the public might not realize it was about a new form of gambling.

Lee, the Racing Commission chair, said he could not predict how commissioners might vote when they reconsider the issue at their January meeting.

But Swihart said his racetrack needs help.

“We are surrounded by states that have multiple gaming options,” he said. “There’s a lot of competition out there.”

Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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