Michigan Racing Resorts to Casino Referendum

Michigan racetracks are pushing a 2010 referendum on casino gambling.

Another showdown is brewing over whether Michigan racetracks should be allowed to open casinos in an effort to revive their struggling businesses. A group called Racing to Save Michigan wants voters to decide the issue in November 2010, and on Oct. 14, the Michigan Board of State Canvassers unanimously approved the form of a petition the group plans to circulate within the next six weeks.

Supporters would have to collect more than 380,000 valid voter signatures to make the ballot. The proposed constitutional amendment would allow state regulators to license up to eight new casinos, five of them at racetracks.

Michigan now has 22 operating casinos, with a 23rd under construction.

A 2004 voter-approved change in Michigan law requires voters to approve most gambling expansions at both the state and local levels unless it involves Detroit’s three casinos or tribal operations. The measure—backed by existing casinos—thwarted an attempt by track owners to install slot machines at their facilities.

Track owners said the change in the state constitution leaves them with little option but to ask voters to approve their plans for full casinos. “I don’t think there is any other route,” said Dan Adkins, vice president of Hazel Park, a Detroit-area harness track and simulcast facility.

Detroit and tribal casinos spent nearly $20 million on the 2004 campaign protecting their turf. Track owners and their supporters spent almost half that amount.

Representatives of existing casinos say the new proposal would end or circumvent the provision in the 2004 amendment that requires a local vote for a gambling expansion.

“I think the coalition will probably revive itself and get active again,” said Tom Shields, a spokesman for MotorCity Casino and a few Michigan tribal casinos. “If they spent $20 million to pass this proposal in 2004, they’ll certainly spend whatever it takes to defend it in 2010.”

Business has declined racetracks in Michigan. Track owners blame much of the decline on the growth of other gambling operations, including casinos and lotteries. Attendance at Michigan tracks fell from more than 2.5 million in 1992 to about 1.1 million in 2008.

Live racing at Michigan’s five major tracks was cut back this year because state support was withdrawn during the continuing budget crunch. One of the tracks—Pinnacle Race Course near Detroit—offers Thoroughbred racing only.

Under the ballot measure, the casinos would pay 30% of adjusted gross receipts.

Michigan Gov. Jennifer Granholm recently signed an agriculture budget bill that removes money for horse racing and the racing commissioner's office.  The bill would have authorized using casino revenue to subsidize horse racing, which she opposes.

The week of Oct. 5, Granholm issued an executive order transferring the racing commissioner’s office from the Department of Agriculture to the Michigan Gaming Control Board.