Bettor Racing Inc, the South-Dakota-based advance deposit wagering (AWD) and off-track betting operator, has filed for Chapter 7 bankruptcy (liquidation) after losing its fight with the National Indian Gaming Commission (NIGC), prompting fears among its customers over the safety of their funds.
The company mainly dealt with high-end customers and so the amount of money owed could be substantial. Bettor Racing cited over $11.8 million in liabilities and less than $1.5 million in assets in documents filed to the bankruptcy courts.
This debt does not cover the sum owed to its paying customers; it’s the amount it must pay NIGC and the Flandreau Santee Sioux Tribe, having lost its longstanding legal battle against the regulator and tribal operator.
Bettor Racing began its relationship with the Flandreau Santee Sioux in 2004, offering ADW at its Royal River Casino. The tribe offered a beneficial pari-mutuel tax rate, but when South Dakota lowered the rate across the board, Royal River no longer offered a USP, and Bettor Racing owner Randy Gallo announced he would move the ADW business out of the casino to pastures new.
The tribe tweaked Bettor Racing’s original contract in a bid to convince the operator to stay, but in doing so, it ran afoul of NIGC, which neither approved the amended contract nor authorized the tribe to approve such a deal.
Both parties were in violation of the Indian Gaming Regulation Act and so NIGC hit Bettor Racing with a $5 million fine and ordered it to pay the Flandreau Santee Sioux an additional $4.5 million.
Gallo Won’t Welch
But Gallo, who in the meantime been approved by the South Dakota Gaming Commission for a license for his new betting venture, South Dakota OTB, has vowed that all of Bettor Racing’s customers will be paid.
“They will get paid 100 percent,” Gallo said of Bettor Racing’s customers. “I’ve been in this business insured up to $10,000 per account. Anything over that I am going to make good. I have never cheated anyone a dime in my life.”
Gallo will not be permitted to launch his new venture until he has fulfilled this obligation to his former customers.