2019 Legislative Gaming Reforms Impact

Michigan Horsemen and Horsewomen,

As you are aware, the Governor signed a package of gaming bills, and the Senate moved forward another bill on Historical Horse Racing right before the holiday season.  The bills signed into law all provide for the modernization of gaming in Michigan and will generate new revenue for the Horse Racing industry in Michigan but will not be nearly enough to transform the industry.  While these bills likely won’t be implemented until later in 2020, they are expected to be an overall small but positive impact on the racing industry.   Initially, the plan was for the historical horse racing language to be included in HB 4310 advanced deposit wagering, however, legislative leadership determines it was a better course of action for our industry to have a separate bill for historical horse racing.  The MHHA firmly believes the historical horse racing bill will infuse the industry with the necessary revenue to move Michigan on to a competitive field with surrounding states and this continues to be our messaging in Lansing.

The Senate passed the historical horse racing bill (SB 661) unanimously (38-0) that will authorize the use of historical horse racing machines at licensed race tracks in Michigan. SB 661, sponsored by Senator Jim Ananich, now moves to the House of Representatives where the MHHA will continue working hard to seek its passage. This bill has the potential to not just infuse the industry with more revenue but also make the business model of owning and operating a track more attractive to outside operators. The MHHA believes this reform is absolutely necessary to open new tracks, including Sports Creek, and truly allow Michigan to compete with neighboring states.

What do these bills mean for harness racing? 

The gaming packages signed allows for online gaming, sports betting, fantasy sports games, advanced deposit wagering on horse racing, and reforms charitable gaming. We estimate on an annual basis these reforms will add about 1 million dollars to the Michigan agriculture and equine industry development fund beginning in 2021 and are likely to increase the MHHA purse pool by about 500,000 dollars annually at Northville Downs. From the online gaming and sports betting bills, 5% of the tax on online gaming and sport betting revenues will be directed to the Michigan agriculture and equine industry development fund up to 3 million dollars.   These figures are all estimates as we are not sure how large the online gaming, sports wagering and advanced deposit wagering market are in Michigan.

There a provision in the advanced deposit wagering bill that was signed by the Governor that the MHHA opposed during the legislative process with Senator Lauwer’s office and continues to oppose. The provision requires the transfer of purse money from the MHHA simulcast purse account in the amount of $900,000 to the HPBA by June of 2020.  This amount was previously in escrow from the closure of Hazel Park in 2018 and was legally transferred in April 2019 to the MHHA by MGCB executive order in accordance with section 431.19a of the horse racing act of 1995.  The MHHA believes this provision was put into the law in order to allow the HBPA to meet the requirement of having purse money available to race for in their 2020 meet and our efforts to have the language removed fell on deaf ears of in Lansing. This provision without the passage of SB 661 may impact the 2020 meet at Northville Downs.

At this time, we are not sure what the future holds for Sports Creek (who has indicated they may need the historical horse racing machines to be able to move forward with an opening in 2020). We also are not sure how quickly the state will implement advanced deposit wagering and how the state will monitor and ensure advance deposit wagering companies are operating in the state in accordance with the law.

The MHHA is moving forward with other stakeholders and the MGCB to seek guidance on the bills that were passed as well as the pending legislation. We are asking that every member contact their local lawmakers in support of passing SB 661. The implementation of historical horse racing machines will transform the horse racing industry here in Michigan, open new tracks, lead to the resurgence of breeding/boarding farms, training facilities and meaningful growth in the agricultural industry.

If you have questions on the bills or who your local lawmakers are please contact the MHHA by phone, email or through the MHHA Facebook page.