SIOUX FALLS, S.D. — A Native American tribe seeking millions of dollars from a company that previously managed a tribal off-track betting business is set to ask South Dakota gambling regulators Wednesday not to make a state rule change that the tribe contends would hamstring its collection efforts.
The Commission on Gaming will weigh removing a requirement that certain electronic wagering businesses use a bank located in South Dakota. The Flandreau Santee Sioux Tribe believes the change would help Bettor Racing Inc. owner J. Randy Gallo evade paying about $5 million owed to the tribe, President Anthony Reider said.
Reider raised the issue in an August letter to Gov. Dennis Daugaard, saying that the rule change appears to only affect Bettor Racing, which accepts wagers primarily from gamblers outside South Dakota on dog and horse races. The move would assist the company in avoiding or delaying the tribe’s ability to enforce a “hard fought” court judgment without fear of violating state rules, Reider wrote.
“If he’s allowed to bounce from bank to bank, state to state, we’ll be chasing him forever,” Reider told The Associated Press.
The company has removed its assets from South Dakota and now operates using bank accounts in North Dakota and Florida, according to a July state court complaint filed by the tribe. Reider wrote in his letter to the governor that doing business from an out-of-state bank is a “clear violation” of state rules and alleged that no enforcement action has been taken against Bettor Racing.
Reider said representatives from the tribe will attend the commission meeting to advocate against the rule change. Gallo, of Florida, and an attorney for Bettor Racing haven’t responded to requests for comment from The AP.
Bettor Racing managed an off-track betting business at the Santee Sioux’s casino from 2004 until 2010, according to the letter. It said federal gambling regulators found that Bettor Racing during that time had received excessive management fees, among other violations, and levied a $5 million civil fine. Reider said the tribe was also punished.
The Santee Sioux filed a lawsuit in tribal court alleging breach of contract and pursuing money it was owed under its management contract with Bettor Racing. The letter says a tribal court this year entered a more than $6 million combined judgment against Gallo and Bettor Racing.
The tribe has collected roughly $1.6 million, though that has been appealed to the state Supreme Court.
The tribe pursued state disciplinary action that resulted in the Commission on Gaming imposing a $1,500 fine on the company. Reider in the letter to Daugaard raised concerns that commission executive secretary Larry Eliason has given improper preferential treatment to Bettor Racing.
Eliason hasn’t responded to messages requesting comment from The AP.
In August, Eliason told reporter Bob Mercer— who covers politics for newspapers across South Dakota— that he had the idea for the banking rule change when he wanted to send a birthday check to a nephew who still banks in South Dakota but now attends graduate school out of state. Eliason noted that his nephew gets paid by direct deposit, uses debit cards to purchase things and gets money from ATMs.
“I thought if this is the way a grad student conducts his daily transactions I should probably look at some of our rules,” Eliason said.