In 1976, a constitutional amendment allowed certain forms of gaming for charitable purposes in North Dakota. Eleven years later, pari-mutuel wagering was legalized, though it was still included as part of the constitutional amendment, and was only allowed for charitable purposes. In 2002, voters in North Dakota approved a constitutional amendment for a state lottery, which could only include multi-state games (such as Powerball and Mega Millions), and not the instant tickets, which are often big sellers for state lotteries.
Though it is ranked 48th out of 50 in terms of state population, North Dakota ranked ninth overall in terms of gross wagering on charitable games. It was also a leader in terms of games which fell outside the “normal” charity fare, including twenty-one and sports pools, though the latter does not generate much revenue. While other states have struggled in charitable gaming, North Dakota’s charity wagering has grown in the last ten years, though marginally, up 7.1% over the period.
North Dakota’s live racing industry is very small, and is typically limited to a few race days each summer; however, at one point it generated remarkable “handle” on off-track betting. OTB was legalized in 1989, and handle stayed between $5 and $6 million dollars; in 1999, however, it started growing rapidly, to $172.1 million in 2002, but then plummeting in 2005 to $5.2 million. It grew so quickly because Racing Services In, which provided OTB to the state, catered to “high rollers,” and lured them to the state through cash rebates. Though controversial at the time, cash rebates are now the standard among account wagering providers. In 2004, the company’s founder and CEO, Susan Bala, was indicted by the federal government, as well as the state attorney general’s office, for running an illegal gambling operation, money laundering, and illegal wire transmission. Bala was convicted in 2005, though her conviction was overturned in a federal appeals court in early 2007, due to insufficient evidence.
Currently, the state of North Dakota defines gambling as “risking any money, credit, deposit, or other thing of value for gain, contingent, wholly or partially, upon lot, chance, the operation of gambling apparatus, or the happening or outcome of an event, including an election or sporting event, over which the person taking the risk has no control.” This is one of the broadest definitions of gambling that you can find in any state law. The concept of a “gambling apparatus” adds further ambiguity, as it is defined as “any device, machine, paraphernalia, or equipment that is used or usable in the playing phases of any gambling activity, whether that activity consists of gambling between persons, or gambling by a person involving the playing of a machine” (Section 12.1-28-01(2)). As certain financial milestones are met, the charges become more severe; however, much like New York State, North Dakota’s gambling penalties target the persons running and profiting from the illegal operations.
Though quite conservative with regards to commercial gambling, North Dakota has not been part of the national conversation regarding the regulation of online poker. If the process were to go state-by-state with regards to online poker, as many expect it to, North Dakota would not sit out a national wave of regulation, but it is not expected to be in the forefront. North Dakota does not, at the moment, directly regulate or license any online gambling operators or operations; this does not make all forms of online gambling illegal in North Dakota, however, it still must comply with the gambling laws of the state.
Despite the issues with OTB, horse racing seems to be making a bit of a comeback in the state. Charitable gambling, once so popular, has recently suffered a string of setbacks, including the closure of a Fargo union hall that at one point served as a local hub for charitable gambling activity.
Casinos in North Dakota
The state also has an active tribal gaming industry, with seven gaming properties and casinos. There are two horse racing tracks in the state – The ND Horse Park in Fargo and Chippewa Downs racetrack in Belcourt.