Originally, it was built as a permanent home for the county fairgrounds. Every time fair is not operating, and it was utilized for other activities and events.

In April 1953, the site was bought by the Hall County Livestock Improvement Association. Its name is originated after August L. “Gus” Fonner, its original landowner who donated the land. Before its inaugural season (April 29, 1954), its first livestock exhibition in September was The Old Reliable Hereford Show and Sale. On April 29, 1954, it opened for pari-mutuel racing in Grand Isle.

Originally, there were only ten horse barns (still standing on the site), and another five more were added in the 60s. Then in 1970, Big Red Barn was built, followed by a clubhouse, grandstand seating, an indoor quarter-mile training track, and other amenities. In March 1979, Fonner Park started to have Sunday races for the first time. In 1988, the track started simulcasts to Lincoln and Omaha.

On March 16, 2020, live racing at Fonner Park was suspended due to health and safety concerns related to the COVID-19 pandemic. However, it is one of the few tracks that continued to operate behind closed doors. They resumed their operation on March 23 with races moving from weekends to a Monday–Wednesday schedule, with only essential personnel present at the track and additional safety protocols. On April 22, the Nebraska Racing Commission approved the addition of 12 additional days of racing in May, extending Fonner Park’s season through May 27, 2020.