The Associated Press notes that the report by legislative auditor James Nobles, made public Tuesday, is critical of the Minnesota Racing Commission's oversight. The report says the regulators failed to provide adequate oversight of the payouts.
A special legislative hearing will be called to scrutinize operations at the park in Columbus, located near Forest Lake north of the metro area.
"They just weren't paying attention frankly," Nobles said of the racing commission.
The report said regulators took years to notice the track improperly calculated amounts that should have gone into purses for winning horse owners. The calculation errors happened from 2008 to 2012. In an interview with the AP, Nobles said that payments to bettors weren't at issue.
"The review was requested by the Minnesota Racing Commission, which has been trying to settle a dispute between the race track's owner, North Metro Harness Initiative LLC, and the group representing horse owners, Minnesota Harness Racing Inc.," according to the Business Journal story.
The commission is under new management and its new leaders promise to promptly seek to recover deficient payments.
Under state law, 8.4 percent of the wagering pool from live and simulcast racing is to be set aside for purses. The audit said the track deducted amounts for track expenses and profits before calculating the purse allocation. State regulators didn't realize there was a problem until May 2013.
In its response attached to the audit, Running Aces General Manager Robert Farinella said the law governing purse set-asides is confusing and the track believes it was in compliance. He said track officials already sufficiently adjusted to account for past deficiencies and that the track would work with the commission to resolve outstanding concerns.
The Business Journal reported that Nobles also wrote that Minnesota law does not clearly state how wagered money should be divvied up, and suggested the Legislature clarify statutes. House Commerce Committee Chairman Joe Atkins (DFL-Inver Grove Heights) told the AP that he would hold a hearing so lawmakers could "discuss steps to prevent this from happening again and to ensure there is absolute integrity and honesty in Minnesota racing."