FARGO, N.D. - A man pleaded guilty Tuesday to helping run an illegal off-track horse betting operation that authorities said pulled in $99 million in wagers and attracted high rollers from out of state.

In a deal reached with prosecutors, Raymundo Diaz Jr. agreed to testify against onetime colleague Susan Bala. In return, prosecutors dropped nine of 12 charges against him, including money laundering.

Diaz, who served as vice president of Racing Services Inc., pleaded guilty to three charges, including conspiracy to conduct an illegal gambling business and faces up to 12 years in prison at sentencing April 1.

Diaz's attorney, Joseph Friedberg, declined to comment.

Prosecutors said Diaz, 39, and Bala, 50, set up an unlicensed parlor for off-track horse betting in Fargo and created an organization called "Brixcorp" to disguise the business and avoid paying taxes or state fees.

Each had faced 12 charges, including money laundering and conspiracy to conduct an illegal gambling business. Nine of the counts carry a maximum penalty of 20 years each.

"There's no denying when you're looking at the amounts of money in this case, it's a significant prosecution," said U.S. Attorney Drew Wrigley. "By any measure, when you look at the allegations of fraud, this case is significant not just in North Dakota, it's significant anywhere."

Bala has pleaded innocent and her trial began Tuesday. Her attorney, Mark Beauchene, did not return repeated telephone calls seeking comment in advance of the trial. But she has said she looks forward to having her day in court.

Racing Services was licensed to provide broadcast signals from out-of-state horse races, such as the Kentucky Derby, to betting parlors in the state.

But the company was not licensed to run its own betting parlor, authorities said. Only charities and other nonprofit organizations may run such establishments in North Dakota.

According to the federal indictment, $99 million was wagered at Diaz and Bala's unlicensed betting site between Oct. 1, 2002, and April 28, 2003, resulting in $19.7 million in revenue.

Authorities said gamblers were attracted to the parlor by cash rebates, which are legal in North Dakota but not in Nevada and some other states.

Dean Meyer, who recently took over as state racing commissioner, said he is working to restore the confidence of the regular horse players.

"It has given us kind of a black eye, no matter how (the trial) comes out," Meyer said.