State Senator Believes Michigan Needs Historical Horse Racing To Save Industry

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Historical horse racing is believed by State Sen. Jim Ananich to be the solution to revive Michigan’s declining horse racing industry. Once boasting eight racetracks, the state now only has a solitary one, indicating its impending demise.

Last year, Ananich introduced S 661 in hopes of reviving a racetrack in his district through the legalization of historical horse racing. Although the bill, along with a group of other gaming bills, successfully passed the Michigan Senate, it unfortunately faced difficulties and was unable to progress in the House.

Despite the bill remaining inactive throughout this year, Ananich is optimistic about its chances of being passed during the lame-duck session following the November elections.

Ananich expressed his hope that there is still a remaining timeframe to accomplish the task, as he is uncertain about the industry’s sustainability without it. In his opinion, it ultimately boils down to making a definitive choice regarding the presence of horse racing in Michigan.

Michigan horse racing: an industry in decline

The sole racetrack in Michigan that currently holds live racing and simulcast racing is Northville Downs, located near Detroit. This racetrack specializes in standardbred harness racing.

Sports Creek Raceway in Swartz Creek is the sole remaining racetrack in the state, with all others having closed down. Situated in Ananich’s district, it ceased its racing activities in 2014.

In 2018, Sports Creek was acquired by AmRace & Sports LLC, with a commitment to revive thoroughbred racing in Michigan. However, their plan was contingent on the state’s approval of advance deposit wagering and historical horse racing.

In the previous year, the state of Michigan successfully legalized advance deposit wagering. Consequently, online horse betting commenced in the state in the month of June.

Ananich expressed that they were informed about the necessity of having a greater variety of gaming options for tracks to succeed.

After the emergence of casinos, tribes gained gaming rights, and the state-sponsored lottery experienced growth. They believe that incorporating advance deposit wagering and pari-mutuel wagering can revive the feasibility of this kind of racetrack.

What is historical horse racing?

Historical horse racing machines closely imitate slot machines as they enable customers to place bets on replays of random races from the past. The gameplay experience on these machines is so similar to slot machines that it becomes difficult to tell them apart.

Across the nation, horse racing encounters the identical obstacle of ensuring its survival.

One of the states that has successfully revived its industry is Ohio, which has transformed its racetracks into racinos by permitting the addition of slot machines.

Casino games are prohibited at racetracks in Michigan due to the absence of authorization. Moreover, Michigan voters passed a ballot proposal in 2004, mandating that any expansion of gambling requires voter approval. Consequently, racetracks are unable to acquire standard slot machines without seeking permission through the ballot process.

This implies that HHR games must be categorized as part of the authorized pari-mutuel activities within racetracks.

Kentucky court ruling’s impact on Michigan

The Kentucky Supreme Court’s ruling last month dealt a blow to historical horse racing, as it determined that specific systems offered in Kentucky do not qualify as pari-mutuel wagering.

Looking at the positive aspects, this ruling offers a clear plan for categorizing these games as pari-mutuel. It specifies that they should focus on a singular event and the betting pools should be created by the players themselves.

According to Ananich, the court did not explicitly prohibit historical horse racing but rather imposed restrictions on how it should be conducted. He believes that the implementation of these restrictions was incorrect.

According to Ananich’s bill, pari-mutuel wagering is defined as:

A betting system in which individuals place their wagers on the outcome of a live horse race, whether it has already occurred or is scheduled for the future, within a wagering pool managed by an operator. It is important to note that participants do not bet against the operator.

Trying to get Michigan casinos on board

Ananich is advocating for a similar boost to be given to horse tracks, just like the legislature did last year for commercial and tribal casinos by legalizing online casino and sports betting.

Ananich acknowledged that casinos are employing the argument that historical horse racing does not fall under parimutuel wagering in order to influence the bill. He has inquired with casinos about the necessary requirements to ensure the success of the bill.

He listed two alterations he is open to contemplating:

• Ensuring that all upcoming horse racing facilities are located at a designated distance from an existing gaming establishment.
• Imposing a restriction on the maximum quantity of historical horse racing machines permitted per property.

Ananich expressed his belief that after years of experience, there exists a potential solution that can benefit both casinos and the horse racing industry. Although he acknowledges the opposing views, he remains hopeful that they will reach a compromise in the near future. Currently, they believe that delaying the bill will exempt them from making any changes, but Ananich is determined to alter this perception through his diligent efforts.

So far, they have refused to engage in negotiations. Ananich remains optimistic about collaborating with the casinos and tribes. However, an attempt to include the HHR bill in online poker compacting legislation was withdrawn due to opposition from the casinos.

Sen. Curtis Hertel Jr., the supporter of the historical horse racing legislation, is the author of that bill.

“We have reached a critical point where only one harness track remains, and it would be highly beneficial for the industry to have some form of support or development.”

Historical horse racing could face legal challenge

Should the bill pass despite the casino’s objection, it may result in a legal battle questioning whether HHR can be considered as an expansion of gambling. Ananich argued that it is simply an update to the industry.

Ananich stated that the court system serves a purpose, and if individuals are dissatisfied and believe they can succeed in court, they have the choice to pursue that route. He expressed confidence in our position, but if others hold a different perspective, they have the option to seek resolution through legal means.

If Michigan tribes perceive it as a gaming expansion, there might be additional repercussions. In such a case, tribes could opt to cease revenue sharing payments to the state if they consider HHR to be in violation of the terms outlined in their gaming compact.

The legislature and governor should carefully consider all of these significant matters.

Path forward for Michigan historical horse racing

Due to Michigan’s biennial sessions, the Senate vote on S 661 from last year extended into the current year. Since February, the bill has remained under review in the House Ways and Means Committee.

Ananich is hoping to secure a committee hearing prior to the election, with the intention of preparing the bill for successful passage during the lame-duck session.

Ananich stated that the investors won’t delay indefinitely; eventually, they will pursue other possibilities for the property. Ananich’s goal is to transform the long-abandoned property in his district into a valuable asset once more.

Ananich remains optimistic about the bill’s progress, believing that there are enough votes to advance it out of the committee and secure its passage on the House floor, despite the lack of casino support. However, obtaining support from the governor’s office is crucial before advancing the bill, as a veto could potentially derail its success.

Ananich expressed that it is only equitable to provide support to the horse racing industry. He acknowledged that horse racing may still face challenges, but believes it is important to grant it a fair chance and provide the necessary resources.

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