Amidst Revenue Records, Michigan Senate Advances Historical Horse Racing Bill

Written By Derek Helling on November 23, 2021

October was an amazing month for gambling companies in Michigan, with new gambling revenue marks recorded.

Now, horse racing interests in the Great Lakes State are closer than ever to getting a bigger slice of that pie thanks to the advancement of a Michigan historical horse racing bill.

If it becomes law, it would bring historical horse racing gaming to MI at its existing track and perhaps revive old venues. But time is growing short to make it happen, according to the bill’s sponsor.

What Michigan historical horse racing might look like

In many ways, the bill resembles the historical horse racing law that Kentucky enacted in February. HHR machines resemble slot machines in their appearance and gameplay function. It’s a gaming console in which you insert your wager and then activate the game to see the result.

The big difference between HHR and the slot machines at a casino like MGM Grand in Detroit is that those slot machines operate on a random number generator. When activated, an RNG game employs the generator, and whether the play results in a prize and which prize depends on which number comes up at the time.

HHR machines instead employ actual past results of real horse races, hence the name. When you make your play, the machine essentially assigns you a horse in a race and whether you win depends on how the horse you got fared in that race.

In KY, OTBs and tracks have rooms with dozens of these machines. They’re an important revenue generator for those businesses. That’s the exact reason why some legislators in MI are pushing the issue.

Michigan Senator says HHR is vital for state

Earlier this year, MI Sen. Dan Lauwers laid out exactly what is at stake for the horse racing industry with his bill.

“It’s kind of the final attempt here if you will,” Lauwers said. “We’re down to one track and the investors looking at Sports Creek Raceway made it clear they will pull out if they don’t get this. If we get this done, we’ll possibly have two tracks. If not, we’ll probably lose the one we have.”

The one track Lauwers referred to is Northville Downs near Detroit. Sports Creek Raceway is in Lauwers’ district in Ananich. It’s currently dormant but the owners have pledged to revive it with thoroughbred racing if they could offer HHR.

Earlier this month, Lauwers’ bill took a big step toward that end. The MI Senate passed it and it now is in committee in the MI House of Representatives. The bill, SB 396, does face some obstacles moving forward, though.

Other Michigan gaming interests pushing back

This is the third consecutive year that horse racing interests have tried to enact an HHR law in Michigan. In each of the past two years, the majority of the opposition has come from other gambling operators fearful of losing revenue.

Lauwers says he has extended invitations to casinos in MI to get their input on a compromise on HHR. However, he states that he has been rebuffed. He worked some provisions into the law to make it more palatable for casinos, like:

  • Limiting the tracks in the state to three and the number of HHR terminals at each to 1,500
  • Restricting tracks’ locations, such as banning tracks within 40 miles of a tribal casino with a hotel
  • Increasing the tax rate to the same 19% rate casinos pay
  • Offering casinos the ability to apply for simulcast licenses

It’s unclear whether that will be sufficient to calm concerns. For one thing, it doesn’t seem the casinos are interested in simulcast wagering. Additionally, the location restrictions in the bill don’t offer a buffer zone to Detroit’s commercial casinos.

Casinos might have enough support in the House to kill the bill. Lauwers is working on a short time frame this year and stresses that it’s 2021 or bust.

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Will historical horse racing bill become a last-second play?

Only a few days remain in the current legislative session. Delegates return on Nov. 30 and the current calendar closes the session on Dec. 9. There is a possibility for three days of “overtime,” but that’s the best-case scenario right now.

In that time, the bill would have to clear the House Regulatory Reform Committee, see a successful vote on the full House floor, and then get the signature of MI Gov. Gretchen Whitmer. Her support is a wildcard right now and puts even more emphasis on quick action for the supporters like Lauwers.

“We moved it because if we wanted any chance to get it done before the end of the year, we had to move it and continue the momentum for an industry that is fighting to stay alive,” Lauwers commented.

In a state that just set new records for both Michigan online casino revenue and Michigan sports betting handle, the horse racing industry sees a lifeline in Michigan historical horse racing. If Lauwers’ reading of the situation is correct, time is running out for the state to extend that line.

Photo by Otto Kitsinger / Associated Press
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Derek Helling

Derek Helling is a freelance journalist who resides in Chicago. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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