Horse racing is a dying industry in Michigan, down to a single racetrack from a peak of eight. State Sen. Jim Ananich thinks he has the solution to reverse this course — historical horse racing.
With the promise that historical horse racing would revive a racetrack in his district, Ananich introduced S 661 to legalize the activity last year. The bill passed the Michigan Senate along with a package of other gaming bills but stalled in the House.
While the bill has sat idle so far this year, Ananich hopes to get it passed in the lame-duck session following the November elections.
“I’m hoping we still have a window of time to get it done because I’m not sure how much longer the industry can last without it,” Ananich said. “To me, it’s either we decide we’re going to have horse racing in Michigan or not.”
Michigan horse racing: an industry in decline
Northville Downs near Detroit is the only Michigan racetrack remaining that hosts live racing and simulcast racing. It offers standardbred harness racing.
Sports Creek Raceway in Swartz Creek is the one other racetrack left standing in the state. Located in Ananich’s district, it stopped operating races in 2014.
AmRace & Sports LLC bought Sports Creek in 2018 and pledged to bring thoroughbred racing back to Michigan. But only if the state authorized advance deposit wagering and historical horse racing.
Michigan did legalize advance deposit wagering last year. Online horse betting began in Michigan in June.
“They told me that they need to have more gaming options for tracks to make it,” Ananich said.
“Casinos started popping up, then tribes got access to gaming, and the state-sponsored lottery expanded. They think advance deposit wagering along with this type of pari-mutuel wager can help make this type of track viable again.”
What is historical horse racing?
Historical horse racing machines simulate slot machines by allowing patrons to wager on replays of random races from history. The play on many of them is nearly indistinguishable from slot machines.
Horse racing faces the same challenge of survival across the country.
Some states have revived the industry by allowing racetracks to have slot machines, turning them into racinos. Neighboring Ohio is one of those states.
Michigan racetracks aren’t allowed to offer casino games. And since Michigan voters approved a ballot proposal in 2004 requiring voter approval on any expansion of gambling, they couldn’t get standard slot machines without going to the ballot.
That means it is necessary that HHR games fall under the pari-mutuel umbrella authorized to racetracks.
Kentucky court ruling’s impact on Michigan
Historical horse racing received a blow last month when the Kentucky Supreme Court ruled that certain systems offered in Kentucky are not pari-mutuel wagering.
On the bright side, the ruling provides a blueprint for how these games can be considered pari-mutuel. They must be on a single event and the betting pools must be established by players.
“The court didn’t say they couldn’t do historical horse racing,” Ananich said. “It just limited the way they had to do it. Just the way they put it in place is wrong.”
Ananich’s bill describes pari-mutuel wagering as:
A system by which the wagers on the outcome of a live horse race, run in the past or to be run in the future, are place with, or in, a wagering pool conducted by an operator … and in which the participants do not wager against the operator.
Trying to get Michigan casinos on board
Ananich admitted that the casinos are using the argument the historical horse racing is not parimutuel wagering to lobby against the bill. He’s asked casinos what they need to make the bill work.
He outlined two changes he’s willing to consider:
- Making any future horse racing facilities a specified distance from an established gaming entity.
- Limiting the number of historical horse racing machines allowed per property.
“I’ve been doing this long enough that I think there’s a way for it to be a win-win for casinos and the horse racing industry,” Ananich said. “I understand their opposition but hope they’ll give me some form of ‘what you can live with’ relatively soon. Right now, they think if they can get the bill tied up then they don’t have to, but I’m working pretty hard to change that.”
Thus far, they have declined to negotiate. Ananich is still hoping to work with the casinos and tribes. A recent effort to attach the HHR bill to online poker compacting legislation was withdrawn because of the casino opposition.
The author of that bill, Sen. Curtis Hertel Jr., supports the historical horse racing legislation:
“We’re dwindling to the point where there’s one harness track remaining. It would be nice for the industry to have something.”
Historical horse racing could face legal challenge
If the bill does pass against casino objection, it could lead to a lawsuit on if HHR constitutes a gambling expansion. Ananich asserted it is merely a modernization of the industry.
“The court system is there for a reason, and if they don’t like it and think they can prevail in court, that’s their option,” Ananich said. “From my read on it, we’re fine, but if they think otherwise they can take it to court.”
If Michigan tribes see it as an expansion of gaming, it could lead to further consequences. Tribes could elect to discontinue revenue sharing payments to the state if they deem HHR violates terms of their gaming compact.
These are all serious issues for the legislature and governor to consider.
Path forward for Michigan historical horse racing
Since Michigan has biennial sessions, last year’s Senate vote on S 661 carried over to this year. The bill has been in the House Ways and Means Committee since February.
Ananich would like to get a committee hearing before the election. That would prepare the bill to pass in the lame-duck session.
“These investors can’t hold off forever,” Ananich said. “They will just do something else with the property. I’m just trying to take this property sitting vacant in my district for a long time and turn it into something valuable again.”
Even without casino support, Ananich is confident the votes are there to move the bill out of the committee and pass it on the House floor. But he still needs to get support from the governor’s office before moving the bill, or else it could be vetoed.
“To me, it’s just fair to throw a bone to the horse racing industry,” Ananich said. “Horse racing still might not make it, but at least it will be given the opportunity and the tools.”