Sponsors of a bill to lower taxes on horse racing bets say they wish they had known more about a Fargo company's financial troubles.

Federal and state authorities are investigating Racing Services, Inc., the state's only licensed simulcast operator. The company provides 10 sites for bettors to watch and wager on out-of-state horse racing.

Last month, state Racing Commission Director Paul Bowlinger said that Racing Services underreported the amount of horse racing bets it took in by $98.9 million in 2002 and early 2003.

The commission also ordered Racing Services to get caught up on $1.5 million in back taxes due on racing bets.

Sen. Joel Heitkamp, D-Hankinson, sponsored a bill at the state Legislature that cut state taxes on horse-racing bets.

Racing Services Chief Executive Officer Susan Bala and another company executive, Mike Cichy, lobbied for the bill.

Heitkamp said he still supports the measure because failing to cut the taxes could have prompted bettors to take their business to other states.

"We, of course, had no idea that Susan wasn't paying her bills," Heitkamp said. "Had we known, I don't know if she'd gotten as good a reception."

The bill still was a good idea, said Sen. Tony Grindberg, R-Fargo, who was a co-sponsor.

"I think what we did was the right thing. I'm disappointed in not having more information," Grindberg said.

He said the Racing Commission should have told lawmakers that Racing Services was behind in its tax payments.

Grindberg, Heitkamp and other supporters said North Dakota had to lower its tax on pari-mutuel betting because other states recently enacted lower taxes and were luring business away from states with higher taxes.

Most of the millions of dollars in horse racing bets placed in North Dakota are from a few people who do it for a living and live outside the state.

Racing Services was able to attract such bettors because of a rebate program the company offers, which is similar to one outlawed in Nevada several years ago.

As a result, North Dakota saw its horse bets jump from $9 million in 1998 to $172.1 million in 2002.

"That bill was all about those people pulling out," Heitkamp said. If they did, "Our take becomes nothing and our horse racing business in North Dakota becomes a novelty rather than a business," he said.