Historical horse racing legislation won’t get done in the Michigan legislature this year. But bill author Sen. Dan Lauwers tells PlayMichigan that he holds out hope for passing a bill early in 2022.
However, the House Reform Committee opted not to advance the bill this past week, ending its chances of House passage in 2021.
Lauwers assessed that proponents of the bill would be pushing harder for passage if this were the end of the road for the bill. But, with it being the first year of a two-year Michigan legislative session, SB 396 carries over to 2022.
It will start the new year already passed by the Senate and one step from the finish line.
… Well, maybe a large leap through dangerous waters.
“If it were a true lame-duck year like next year will be, that would be a major problem and we’d increase the pressure of what we’re doing right now,” Lauwers said. “But we’re just going to roll the calendar over and pick up next year where we are today.”
Committee hearing doesn’t go well for HHR
After the Senate passage, the House referred the bill to the Regulatory Reform Committee.
Rep. Roger Hauk chairs that committee. His district includes the Soaring Eagle Casino and Resort, operated by the Saginaw Chippewa Indian Tribe.
At the hearing, Tribal Chief Tim Davis said the HHR bill violated the state constitution. The constitution requires that new forms of gambling are subject to approval by voters at the state and local levels.
Davis told the committee:
“Given the already saturated gaming market, if passed this legislation will cannibalize the gaming market and reduce our gaming revenues by millions of dollars. This reduction will cause a corresponding negative impact in programs and services to our members and surrounding community. It will also cause a reduction in our payments to local governments to the detriment of services provided to their citizens and communities.”
Davis went on to explain how, to a patron, HHR machines seem to play just like slot machines. Historical horse racing machines can randomize based on results of past horse races. It differentiates itself by utilizing parimutuel wagering, where bets are put in a pool similar to wagers on live racing.
“Simply put, the proposed legislation would essentially create ‘racinos’ in Michigan by allowing operators to install machines that don’t pass the slot machine smell test,” Davis said. “The only difference between a slot machine and the machines proposed is what happens when you push the bet button.”
More from Michigan House committee hearing
Steven Watson, the deputy chief financial officer and budget director for the City of Detroit, provided the other significant voice of opposition at the hearing.
Watson explained that Detroit is expecting $270 million this year as a result of the city’s three commercial casinos. For every 1% loss in gaming revenue, he contended the city would have to cut 32 police officers or firefighters to keep the budget balanced.
He added that the proposed gaming expansion before the committee would put the entire economic comeback at risk.
A representative of Northville Downs, the only horse racetrack currently operating in the state, spoke of the necessity of HHR to keep the horse racing industry alive in Michigan. So too did the Michigan Harness Horsemen’s Association and others.
Lauwers couldn’t be at the hearing because he was quarantining as a COVID-19 close contact.
Even if the committee meeting didn’t go well, Lauwers sees the chair of the House Regulatory Committee giving HHR a hearing as the first step to getting it through the House.
“I took out of the hearing that we got the time before the committee and we didn’t get blown out and told not to come back,” Lauwers said. “I think we saw in the committee where our challenges are. We’ll continue to work on those challenges and see if we can move the ball.”
There’s still time to save Michigan horse racing
Entering the year, Lauwers called this the final, do-or-die attempt to save Michigan horse racing.
Michigan used to have nine race tracks. Now it has no thoroughbred tracks, with Northville offering harness racing.
In 2018, AmRace & Sports LLC bought Sports Creek Raceway and pledged to bring thoroughbred racing back to Michigan. Sports Creek closed in 2014.
But they’ll only reopen the track if allowed to offer historical horse racing. Lauwers and fellow Senators Jim Ananich and Curtis Hertel Jr. have been trying for three years to pass HHR legislation.
However, Lauwers said that supply chain issues have given them a little more time to save the Sports Creek deal. AmRace has been able to use the facility to store trucks from the nearby General Motors Flint Truck Assembly. The GM factory was forced to halt production by a semiconductor chip shortage.
“We have a little reprieve in the pressure from the people at Sports Creek,” Lauwers said. “It gives us a little extra time.”
But Lauwers doesn’t want to take this leeway for granted. He wants to get HHR done as soon as possible.
“I do want to get it done right away in 2022,” Lauwers said. “People have money invested and investments don’t sit around waiting for opportunities. I’m afraid that money will move to a state where horse racing is better supported if we don’t get it done early in the year.”
But it’s going to be an uphill battle
So what will it take for the House to pass the HHR bill in 2022, and for it to get the governor’s signature?
Lauwers explained that, for the bill to move forward, it needs a green light from the Chippewa tribe or the governor. Even though Sens. Hertel and Ananich are close Democratic allies with Gov. Gretchen Whitmer, she hasn’t yet made discussing HHR a priority.
“It’s clear if we’re going to get movement on the policy side, it’s going to be a negotiation with the Chippewa Tribe and, if it’s not that, a commitment from the governor,” Lauwers said. “Either one of those two things removes the barriers and allows us to advance the bill.”
Before passing the bill through the Senate, Lauwers made an effort to address concerns. These included not allowing a racetrack open within 40 miles of a tribal casino, and earmarking some HHR revenue to Detroit and the School Aid Fund. Lawmakers also offered to allow tribes and commercial casino operators to get involved in the horse racing business.
“We know where we need to do work, so those are the people we’re trying to get in front of and say, ‘What can we do to increase your comfort level and reduce your opposition?’ Lauwers said. “We’re doing all we can to make sure they don’t interpret historical horse racing as a threat.”
But judging by the hearing, lawmakers still have a long way to go to remove the obstacles to passage.
“I still think we’ve got an opportunity here to get it over the finish line,” Lauwers said. “So we’re going to keep pressing.”