Casino Industry Opposition Defeats Michigan Historical Horse Racing Bill

Michigan failed to pass legislation legalizing historical horse racing this year, putting in jeopardy the future of its racing industry.

It’s the second year in a row that the House did not pursue the bill. The Senate passed it along with a package of gaming bills late last year.

The bill appeared to have hope earlier this month when a House committee amended and advanced the legislation. Changes appeared to address some concerns of Michigan casinos and gaming tribes.

However, it turns out the Michigan casinos and tribes did not drop their opposition. With their opposition, the governor was not going to sign the bill, according to co-sponsor Sen. Dan Lauwers.

“We’re going to regroup and look at it again next year,” Lauwers said.

“I think we can make some changes to make it less threatening if that’s what we need to do for casinos. If we do that, hopefully we can get the governor’s support.”

Casino won’t budge on historical horse racing

Historical horse racing (HHR) machines are games based on the results of random horse races held in the past. However, in a recent trip to a legal HHR spot in Virginia, PlayVirginia’s Dann Stupp noted that they looked, sounded, and essentially played like slot machines.

That’s why the commercial and tribal casinos don’t like them. Rep. Brandt Iden made changes to the bill including limiting the HHR machines to 500 per track, but it wasn’t enough.

Fred Harrington, a tribal council member for the Little Traverse Bay Bands of Odawa Indians, told Playinmichigan that tribes would have ceased making gaming payments to the state if the HHR bill went into effect.

“It’s against our compact,” Harrington said. “They said that we wouldn’t have to worry about competition in order to get a compact. The only reason we pay compact fees are for exclusivity. If they violate the compact by authorizing other gaming, then it alleviates our need to pay the compact fees.”

But Lauwers said he thought the Detroit casinos did more to block the bill than the tribes.

“Unfortunately, it seems a lot of people think this is a fixed size of pie they all compete over,” Lauwers said. “I’ve never seen horse racing as really being in the same pie as casinos.”

Michigan racetracks in a perilous situation

Only one racetrack remains active in Michigan. Northville Downs near Detroit offers live standardbred harness racing and simulcast wagering.

The track already was struggling before pandemic-related closures this year.

AmRace & Sports LLC wants to revive the vacant Sports Creek Raceway, but only if the state legalizes HHR. With the Michigan legislature failing to act, that deal could fall through.

“I know this puts them into a position where they have to make those hard decisions,” Lauwers said.

“That’s why we’ll redouble efforts next year and see if we can come up with a way to make it happen. I know investment dollars don’t usually sit around. So I’m concerned this may put those investment dollars at risk to go to a different state where they’re more welcome. I sure hope they stay in Michigan.”

Future of Michigan historical horse racing

Lauwers and sponsor Sen. Jim Ananich will need to introduce new HHR legislation and start the process over in the next session.

If the sponsors can get broad gaming industry support, they are confident they can get Gov. Gretchen Whitmer’s support. Lauwers suggested that one idea is to discuss variations of HHR machines that might be more acceptable to the casinos.

He indicated that, without the governor’s support, even if the House sent the bill over, the Senate was not going to concur.

So the Senate sponsors backed off the push and decided to hit it from a different angle next year.

“The danger we had is if we sent it to the governor and she vetoed it, we put her in a position to explain next year why she changed her position,” Lauwers said. “If we don’t back her into a corner and make her veto, it may be easier to get her support next year.”