Michigan’s Racing Operators Call for Gaming Control Board to Change Its Electronic Gaming Policies

In recent years, Michigan’s horse racing industry has dwindled to two racetracks: Hazel Park Raceway and Northville Downs. In recent years, the casinos have quarreled over revenue sharing, as both racing complexes struggle to remain viable in the current gaming environment. Card clubs exist elsewhere in Michigan, while lottery gaming and online casinos have given Michigan gamblers other options — both legal and illegal ones.

After years of disputes, Northville Downs and Hazel Park have found something they agree upon: the need for electronic or online gambling. Both racetracks have supported Senate Bill 504, a controversial proposed law which would give the racetracks the ability to offer online gambling in a limited form.

Lawmakers Balk at SB 504

The electronic gaming provisions have proven too controversial for lawmakers, who do not want to attach their named to anything controversial in an election year. Spokesmen for the racing interests say they do not believe SB 504 is going to pass through both state houses anyway. Certainly, they are preparing to legalize electronic gambling another way.

Northville Downs and Hazel Park now hope the Michigan Gaming Control Board changes its policies as an “administrative rule change”, which would circumvent the need for a new law to be passed.

Petition to the Gaming Control Board

For that reason, Michigan Horsemen’s Benevolent and Protective Association (which is associated with Hazel Park) is calling on the Gaming Control Board to change it policies to allow the racetracks to launch online gambling.

They are asking for the GCB to rule that gamblers could make bets on simulcast races through their desktop computer or tablet computer at home. Current state law requires bets to be made from inside a racetrack complex.

Why Electronic Betting Should Be Allowed

The track operators see electronic betting from home to be an extensive of the electronic gambling which takes place at the pari-mutuel betting venues, minus the paper and plus the mobile or computing device. Changing the policy would allow people to gamble from home, something that both operators believe is essential for the continued health of horse betting in the 21st century and beyond.

Why Electronic Betting Should Be Banned

Opponents of online gambling in Michigan see it as a vast expansion of gambling in the state. Many people who have no problem with betting in a public venue have a major problem with online betting. They believe the convenience and privacy makes it much easier for problem gamblers to fall into unhealthy betting patterns. They point out that brick-and-mortar gaming facilities must comply with state laws that require them to monitor gambling habits.

Proponents of electronic gambling argue that online gambling takes place, by and large, within the private confines of one’s home. In their mind, no place should be protected from the government’s bans more than one’s private residence, because such laws touch on questions of liberty, property, and privacy. They believe the government has no right to ban practices in their homes, unless people are harming others.

State Senator Dave Robertson

Sen. Dave Robertson’s Senate Bill 504’s main goal was not to pass electronic gaming, though it was part of a broad package to boost the chances the racetracks could survive. The main goal of SB 504 was to change how money from racing is distributed.

SB 504 is the first change in the horse racing law since 1995, when 9 racetracks were active in the state. At the time, the law made a lot more sense, because it was pooling the resources of 9 tracks. Since 1998, 7 of the tracks have closed, leaving only two sites pooling their revenues.

Current Law’s Revenue Sharing

Though the two parks have much different forms of racing, the two are competing for the same customers. The current law has the tracks paying a 3.5% state tax, then sharing the remaining revenue in a two-thirds divide for harness racing operators and a one-third divide for the thoroughbred racing. A law passed for a much different business niche needs changing 21 years later.

Robertson’s bill creates a “site-specific model”, meaning only that the racetracks would keep the money they collect on-site. Even the track which loses money under the new law has to agree that SB 504 would establish a fairer system. Yet both Hazel Park and Northville Downs say they have no chance of remaining economically viable in the coming years, if they cannot access more cash.

About Cliff Spiller

Cliff Spiller has been an online writer for 14 years. He worked for Small World Marketing for a decade, where he covered topics like gaming, sports, movies, and how-to guides. Since 2014, he has blogged about US and international gambling news on BestOnlineCasinos.com, USPokerSites.com, and LegalUSPokerSites.com

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