New-look racino team will push ag benefits

Quinn Cheney to join lobbying effort

Jeff Hilger describes himself as first and foremost a horse guy.

Hilger owns a sprawling farm in Stillwater where he breeds thoroughbreds. He has also worked in the corporate world. Until the late 1980s, he owned the Koala Corp., which sells baby-changing stations for public restrooms. One thing Hilger’s a bit low on is political experience. Besides testifying in front of committees over the years on behalf of legislation for slot machines in racetracks — better known as racino — Hilger is proud to say he has “as little as possible” political bona fides.

But Hilger is part of the racino lobby’s new look in 2012, as supporters try yet again to pass the proposal through what has historically been a reluctant Legislature. He is one of a three-member team that will take over Racino Now after former Republican Senate Minority Leader Dick Day departed in October to start his own lobbying firm. Racino Now will also get a new name. The group, which was started by Canterbury Park and the horse groups that race on its tracks two years ago, will slowly phase out its old moniker and become the Equine Development Coalition of Minnesota. The goal is to push racino’s benefits to the horse and agriculture industry instead of highlighting the gambling side next session.

“I’ve always been one that felt the racino was really a small part of the equation,” Hilger said from his Bleu Valley Farm on Thursday afternoon. “The state has an opportunity free of charge to build the [agriculture] industry by $1.5 billion. That’s the approach I’m going to take, not that gambling is good or we should expand gambling.”

Racino supporters also walk into the 2012 session with two new weapons at their side. At the behest of Canterbury Chief Executive Officer Randy Sampson, former Supreme Court Chief Justice Eric Magnuson drafted an opinion that offers a different reading of the looming legal questions that have always surrounded talk of expanded gambling. And in the case of tricky fiscal estimates, GOP Rep. Tom Hackbarth has obtained a fiscal note from the Minnesota Department of Management and Budget (MMB) sporting a $133 million biennial revenue figure that will surely raise some eyebrows next session.

Horsemen take center stage

Hilger, who will serve as president of the group, will be joined by lead lobbyist Quinn Cheney. Cheney recently left a job with Solomon Strategies Group, where she lobbied for the Minnesota chapter of the Horsemen’s Benevolent and Protection Association. Before that she worked as a manager of government affairs for the Williams Co. and as the political and economic relations officer at the Canadian Consulate General of Minneapolis.

Her political roots run red. She got her start as a legislative assistant to former Republican U.S. Sens. Larry Pressler and Dave Durenberger and worked as a senior policy aide to former Gov. Tim Pawlenty. She also spent time in his administration as the director of policy and development at the Minnesota Department of Agriculture, a job that sources say will make her an authoritative and effective lobbyist for the agriculture industry next session.

“She is fairly new to the lobbying scene, but she has broad public policy background,” said former DFL Rep. Al Juhnke, who worked with Cheney when he carried the racino bill in the Legislature. He passed the bill out of his own Agriculture Finance Committee in 2010, the only time racino has been passed through a committee in recent years. “Being an old Pawlenty office staffer, she has some connections to the GOP leadership that are unique.”

As in Hilger’s case, lobbying will be a new endeavor next session for the group’s executive director, Rosemary Higgins. The Princeton-based quarter horse breeder and racer has always been a fierce supporter of racino and the racing industry. In July, she joined hundreds at the Shakopee racetrack to protest the government shutdown, which had closed Canterbury and threatened its survival. She carried her own sign: “My horse needs a job!” But she is low on political connections. Hilger said he and Higgins will both likely register soon to lobby at the Capitol.

While Canterbury and the group’s efforts have gone hand-in-hand over the years, the park is pulling away from Racino Now and letting the horse groups run the show. Canterbury’s team of lobbyists — led by James Clark at Messerli & Kramer — will remain intact, but longtime radio personality Ron Rosenbaum will take a front-and-center role in media relations after Day’s departure.

Rosenbaum calls the racino effort a “labor of love.” The attorney-turned radio host has pushed slots in racetracks on the airwaves for the last 15 years, but he has been a supporter since he was a child, Rosenbaum said. “I grew up going to racetracks around the country and then started going to Canterbury quite often,” he said. “I got to know the Sampsons pretty well. I even owned some thoroughbreds.”

By Rosenbaum’s account, the only way Canterbury can compete with tracks in other states is by adding slot machines. “You’ve got to give these guys a chance to even compete,” he said. And to the expanded gambling issue: “That genie is out of the bottle,” he said. “It’s not going back in.”

Racino digs into legal and fiscal details

In addition to a new lobbying team and strategy, racino proponents feel good walking into the 2012 session with a fiscal note that projects hundreds of millions of dollars in revenue by 2015.

In October, MMB found that Hackbarth’s current racino proposal —which allows racino for the state’s two tracks and sets up a fund for the Vikings and St. Paul Saints stadiums — would generate $133 million in new state revenues per biennium. From that, the stadium fund would receive $120.3 million and the state’s general fund would garner about $13 million per year.

Before this, no serious markup had been done by research staff or the budget office — because no past gambling bill had been specific as to the scale of the expansion envisioned and because past legislation never got far enough in committee to receive a serious fiscal vetting. So the fiscal notes prepared for them were far from rigorous, and their validity was often belittled by opposing forces at the Legislature.

Racino proponents are also armed with an opinion from Magnuson that, in their view, weakens the legal threats that have loomed over gambling discussions in the past.

In 2005, an opinion from then-DFL Attorney General Mike Hatch’s office argued that the 1988 constitutional amendment allowing a state lottery does not permit state involvement in a casino. On top of that, his office raised questions about the constitutionality of all expanded gambling proposals and concluded that the issue would likely need to be brought before voters again as an additional amendment to the state’s Constitution. The opinion has long been considered an open invitation for the tribes to file a lawsuit if expanded gambling passed the Legislature.

But in a nine-page brief, Magnuson argues not only that it’s constitutional for the state to be involved with a casino — as slot machines don’t count as a lottery, he writes, because they do not involve multiple contestants — but that any litigation mounted against such a move would likely be settled within a year. What’s more, Magnuson believes that if a racino bill were to pass, the state could start construction immediately, since any suing party would have a hard time obtaining an injunction from the courts to stall a project passed in state statute.

GOP Sens. Dave Senjem and Al DeKruif, both racino supporters, agree that tying racino to a boost in the agriculture industry will be an appealing message to their Republican colleagues, especially those from greater Minnesota. That strategy, in addition to tying to the dollars to a payback of the expanded school shift and financing for a Vikings stadium, could very well get the votes to pass racino next session, Senjem said.

DeKruif is a little more cautious. He acknowledges that the votes were almost there to pass racino tied to the school shift in the July special session, but he’s not sure what will happen when it’s brought back into the arena of regular session. “We had pretty good support for it just before the special session, and I think we had the votes in the House and the Senate,” he said. “Next session, I’m not sure. The game has changed a bit.”