Michigan Regulator Clears Way For Online Wagering On Horse Racing

With live horse racing shut down in Michigan, the one remaining track and two horsemen’s associations are hoping to get in on the online action.

The Michigan Gaming Control Board announced licensing terms and conditions Tuesday for companies to offer advance deposit wagering using a mobile device or computer, which is already offered by some companies.

The order is part of the process to regulate ADW after Gov. Gretchen Whitmer signed extended gambling laws for Michigan in December.

“The order should enable the state’s horse racing industry to gain new followers through ADW and maintain protection for citizens who wish to place wagers on live and simulcast pari-mutuel racing in Michigan using their mobile phones,” said Richard S. Kalm, executive director of the gaming board, in a statement.

Operators need to partner with track for license

To obtain a license, third-party operators will have to first make an agreement with Northville Downs, the state’s only remaining track with live racing, and the state’s pair of horsemen’s associations.

Mary Kay Bean, spokeswoman for the gaming board, did not have a timeframe for how quickly licenses could then be processed.

“The MGCB will process applications as quickly as possible once the track has a signed contract with a third-party facilitator approved by the certified horsemen’s associations,” Bean wrote in an email to Playinmichigan. “It is likely the TPF will hold licenses in other states, which will help speed the process.”

Tom Barrett, president of the Michigan Harness Horsemen’s Association, said formalizing the process is a boon for industry.

“I think we were all working toward a solution that would work for everybody, and now that solution is here,” Barrett said. “Our hope is to sign a contract with anybody that has clients in Michigan and bring them into compliance.”

Requirements for license developed by board

According to the order, third-party facilitators are required to:

• Apply for a license
• Provide a proposed plan of operation
• Submit any proposed system operation plan changes to the MGCB executive director for pre-approval
• Pay a $1,000 application fee and a $500 license renewal fee to the MGCB to cover costs of background investigations
• Use and communicate pari-mutuel wagers to a system that meets all Michigan requirements

TwinSpires among available options

Betting on horse racing is already happening in Michigan on websites like TwinSpires, which is owned by one of the industry’s biggest players.

TwinSpires is owned by Churchill Downs Inc., the operator of the famed Louisville track and home of the Kentucky Derby. TwinSpires did not return an email from Playinmichigan on Wednesday.

Barrett said Mike Carlo, the operations manager for Northville Downs, has been in touch with operators about licensing.

“Quite honestly, these particular hubs have been getting the milk for free, and now they’re asked to buy the cow,” Barrett said.

Last week, Churchill Downs reported $67.6 million in net revenue for TwinSpires in the first quarter, up 8.3% from last year.

Other potential operators include AmWager, BetAmerica, DRF Bets, NYRA Bets, TVG and Xpressbet.

Horse racing gaining popularity during pandemic

With sports across the globe shut down, the few horse racing tracks still operating are getting an increase in attention.

Tracks are operating without spectators in states like Florida, Oklahoma and Nebraska with betting interest around the world.

The Associated Press recently reported a 206% increase in horse racing viewership on Fox Sports stations and NBC Sports Network during the shutdown of most American sports.

The industry saw a 24.4% decrease in wagering from April 2019 to April 2020, though there were 72.7% fewer races, according to Equibase.com. Per race wagering actually went up 176.5%, per those figures.

Northville Downs has been closed since March 16 because of the pandemic and will remain closed through Whitmer’s executive order, which currently expires May 28.

Northville Downs registered $62.7 million in wagers in 2019 with $60.5 million of that in simulcasting. The state profited $2.1 million from that.