Historical Horse Racing Bill Gets New Language, Out Of House Committee

Written By Matthew Kredell on December 2, 2020 - Last Updated on December 3, 2020

Gaming bills to allow for multistate online poker and historical horse racing moved through the Michigan House Ways and Means Committee on Wednesday.

Michigan lawmakers wasted no time in getting the gaming bills going in the opening days of the lame-duck session.

Committee chair Brandt Iden offered a House substitute for S 661, the historical horse racing (HHR) bill.

Sen. Curtis Hertel Jr.’s bill to amend the Lawful Internet Gaming Act to allow for multistate pooling for Michigan online poker passed the House Regulatory Reform Committee on Tuesday. It had no trouble in Ways and Means.

Both bills advanced to the House floor with momentum to pass before the end of the year.

Changes to historical horse racing bill

After languishing in the House since passing in the Senate nearly a year ago, it appears S 661 has new life. Facing opposition from casinos, the legislation was pulled from the package of gaming bills passed in Michigan last December.

Iden worked closely with the Michigan casino and tribal gaming interests on the bills last year that legalized sports betting and online casino gaming. So he was the perfect candidate to step in and work out a compromise to get casinos to drop their opposition to HHR.

Key changes to the bill include:

  • Limiting the number of HHR machines a racetrack may have to 500.
  • Tax rate of 19% on adjusted gross revenues (as opposed to 1% on wagers).
  • Annual license fee of $50,000.
  • Expanding the definition of pari-mutuel wagering to specify that such wagers do not include banked games or wagers against the operator.
  • Before a licensed racetrack may offer HHR, the local government must adopt an ordinance authorizing the activity.

Committee looking to tie-bar three bills to HHR

In the past week, Iden circulated three changes to previous legislation to go along with the HHR bill.

These proposals would:

  1. Amend the Lawful Sports Betting Act to redirect the 5% of tax revenue currently going to the Agriculture Equine Industry Development Fund to the Economic Development Corporation.
  2. Strike from the Michigan Gaming Control and Revenue Act that allowing video lottery at racetracks would allow casinos to apply for authorization simulcast horse races.
  3. Change the Lawful Internet Gaming Act to indicate that it does not apply to “internet sports betting under the Lawful Sports Betting Act” rather than “any lawful internet sports betting.”

By tie-barring the proposals to the HHR bill, it can only pass if all of them do as well.

Racing industry can live with changes

Sponsors see the HHR bill as necessary to keep the dying horse racing industry going. Michigan is down to one track in operation, but lawmakers have a prospect for another track contingent on authorizing HHR.

The Senate sponsors of the bill told PlayMichigan that they were not consulted by Iden on these changes.

Sponsor Sen. Dan Lauwers discussed the language with racing stakeholders only after receiving it from PlayMichigan. He heard back that they think they can succeed with the limit to 500 machines.

“In my conversation with industry representatives, they said they would love to see more but if that’s what it takes to get them started and gets the casinos not to be opposed, they are OK with that,” Lauwers said.

He added that the horse racing industry can live with the tax rate and licensing fee.

“I’m excited that the chairman is taking this up,” Lauwers said. “It’s better than not taking it up, that’s for darn sure. I can’t help but think this looks like one of those bills that gets horse-traded in the lame duck. I hope the House can get it out so we can take a swing at it.”

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Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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