Michigan Racino Measure Still Faces Obstacles

Legislation to legalize video lottery terminals at Michigan racetracks took a tenuous, toddling step forward April 29 when the state Senate narrowly approved a racino bill after nearly a year of inaction. But much work remains.

Racinos have been a hot issue in Michigan since last spring when House Rep. Larry Julian pushed through a package of bills and sent them on to the Senate. The legislation languished until the Senate Committee of the Whole voted to bring it to the floor, where it passed on a 20-18 vote.

"This is lifesaving to tracks and horsemen," Julian said.

There are major differences between the Senate and House bills. While the House package permits the creation of off-track betting parlors and legalizes telephone wagering, the Senate version prohibits both. In addition, the Senate version requires county approval vote before VLTs would be allowed, and limits the number of racetracks in the state to nine.

There currently are seven tracks--five Standardbred, one Thoroughbred, and one mixed--in Michigan. State racing commissioner Robert Geake is considering license applications for eight others. The Thoroughbred track is Great Lakes Downs, owned by Magna Entertainment Corp., which has proposed a new track in the Detroit metroplitan area.

A major difference in the bills is where revenue would go.

"Please understand the concept that I introduced these bills under was to increase purse pools and increase breeders' awards with additional revenue going to agriculture enhancement," Julian said. "The Senate bill does a little bit for purse pools, a little bit for breeders' awards--about half of what we did--and nothing for agriculture. So, in between a budget fix for the state and a complete agricultural enhancement is probably going to be the reality."

Geake said he was not ready to declare the Senate vote a full victory for Michigan horse racing.

"It's too early too tell," Geake said. "I think most horsemen would say this is progress in that it would enhance revenue for tracks and purses."

The differences in the two bills will be worked out in a Senate/House conference committee which Julian said he would likely chair. The shape of the final legislation remains unclear.

Also unclear, as it has been from the start, is the position of Democratic Gov. Jennifer Granholm, whose signature is required to make racinos a reality. "The governor will be a part of this process because we need to know what she will sign," Julian said.

The issue has pitted those who believe racinos will help address Michigan's looming $1.3-billion budget deficit and the strange bedfellows composed of casino owners and anti-gambling activists.

A casino-backed group is threatening a petition drive that would require statewide and local votes of approval for racinos. The group had petition language approved by the State Board of Canvassers April 21 and now must gather 317,000 signatures of registered voters by mid-July for the issue to appear on the Nov. 2 ballot.

However, if oversight on racinos is given to the state Lottery Commission, as seems likely, the legal question could become whether voters can override what would technically become a new lottery game--VLTs--or if the commission can exercise its longstanding legal right to create and implement games on its own.