Minnesota Horse track owners upset about appointment of tribal leaders to Racing Commission

The owners of the state’s two horse-racing tracks expressed misgivings and strong concerns Monday about Gov. Tim Walz’s appointment of two tribal leaders to the Minnesota Racing Commission.

Late Friday, Walz appointed Mille Lacs Band of Ojibwe chief executive Melanie Benjamin and Johnny Johnson, former president of the Prairie Island Indian Community. Both tribes run casinos in MInnesota.

“The Racing Commission’s job is to regulate the industry and our two leaders, President Johnson and Chief Executive Benjamin are more familiar than probably anybody in the state on the regulation of gambling,” Walz said, referring to them as “two good folks” who “understand that responsibility.”

The state’s two horse-racing tracks, Canterbury Park in Shakopee and Running Aces in Columbus, were not pleased. In recent years, the struggling tracks have been pushing to offer additional gambling options to at their customers as a means of survival and to boost the purses for live racing.

“We do not believe it is appropriate for competitors of the racetracks to serve in the role of our regulators, and it would be difficult to find a precedent for the recent appointments of long-time leaders of tribal nations that own two of the state’s largest casino operations as members of the Minnesota Racing Commission,” Canterbury Park CEO Rany Sampson said in a written statement.

Taro Ito, president and CEO at Running Aces, called the appointments “a slap in the face to the Minnesota horse racing industry and the thousands of people employed in this $500-plus million a year agricultural sector.”

Ito said Benjamin and Johnson run casinos that compete with the tracks and they lack horse racing experience. He said they replace two commissioners with “extensive equine and racetrack operational experience.”

Neither Benjamin nor Johnson returned phone calls Monday. Both will serve terms beginning July 1 and ending June 30, 2029. The positions are not paid, but they receive $55 per day for the work.

Benjamin, of Onamia, succeeds former Commissioner Roy Johnson. Johnny Johnson, of Welch, takes the place of Dan Erhart. The Mille Lacs band has operated Grand Casino Mille Lacs and Hinckley since 1991. The Prairie Island community has operated Treasure Island Resort & Casino in Welch since 1993.

The Racing Commission provides regulatory oversight for live horse racing and wagering, online wagering, and card clubs at both of Minnesota’s racetracks.

Canterbury Park’s Sampson noted that Racing Commission members have access to confidential business information about track operations.

“Consequently, these appointments raise important concerns for the racetracks, our employees and horse owners,” Sampson said. “Minnesota’s horse industry needs to be confident that all commission members will meet their legal and fiduciary responsibility to regulate racing while promoting the state’s horse industry.”

Ito said the commission has duty to promote and advance the interests of the horse racing industry. “Explain to me how this is possible when the same two individuals have similar duties to tribal casinos, which have a court action against the very commission they will be a part of?” he asked.

Walz said giving Benjamin and Johnson access to proprietary track information is “not a concern” for him. “They’ll do their job. These are ethical folks that will do their job and they have every right to be on the Racing Commission as anyone else,” he said.

The two applied for openings on the commission last Thursday and were appointed Friday, according to state records.

The tracks and the tribes have been at odds at the state Capitol in the push to legalize mobile sports betting. With the DFL in control, the main bills under consideration would give exclusive rights to the tribes to offer sports betting through an established platform.

The tracks have argued that they deserve a share in the action, or at least the revenue, because they’re already in the sports betting business and will be hurt by expanded tribal exclusivity. The complicated pieces of the issue have made it difficult to put together a bipartisan coalition for passage.

The Legislature has not passed a bill to legalize sports betting in part because of the ongoing debate over how to accommodate the tracks. Early in the 2024 session, the Racing Commission entered the discussion when it abruptly voted to legalize Historical Horse Racing (HHR). The tracks say HHR would be a boost to their businesses while the tribes say it is tantamount to video slots and a violation of their exclusive gambling rights.

By the end of the session, the Legislature banned HHR. Running Aces also filed a federal racketeering lawsuit against some of the state’s tribes, alleging some of their card games aren’t authorized under state law. Both the Grand Casinos and Prairie Island are named in the lawsuit which is pending.

Benjamin announced in January that she wouldn’t be seeking re-election to a sixth term as chief executive. Her term is up next month. While she was credited with diversifying the band’s economy beyond gambling, her tenure wasn’t without controversy.

She was removed as chief executive in 2008 and charged with theft in 2010 in Mille Lacs County District Court after it was discovered she used thousands of dollars in tribal money for improvements to her home and illegally used casino comping privileges.

She entered an unusual Alford plea to the charges in January 2012 and was re-elected in June that year. The plea is an admission that the state had enough evidence for a conviction, but is not an admission of guilt.