In Michigan, Racetrack Gaming Part of Proposal

by Tom Schram

The future of Michigan's Thoroughbred industry may lie squarely in the hands of three departing Republican politicians who are working against a year-end deadline to decide the fate of a legislative package that could reinvigorate racing in the state.

State Representative Judith Scranton is the sponsor of a seven-bill package that would bring off-track wagering, telephone wagering, card rooms, keno, and racetrack video gaming to Michigan. Scranton is allied with George McManus, chairman of the Senate Farming, Agribusiness, and Food Systems Committee in her efforts.

Any legislation would need to be signed by Gov. John Engler. All three will be out of office next year due to Michigan's term-limit law.

Scranton met in Lansing July 29 with representatives of all of the state's major owner and breeder organizations to get their final input on the legislation. She called the meeting a "drop deadline" for changing the bills because of the logistics involved in revisions. She said she is "preparing for a committee vote in September" that would bring the bills to the House floor in November.

Video gaming at the racetracks alone could generate annual income for the state of up to $375 million, according to a study conducted by the Michigan Harness Horseman's Association.

Left unsaid is the impact the legislation would have on bringing a new Thoroughbred plant to metropolitan Detroit. It is an open secret that racing behemoth Magna Entertainment Corp. is considering just that possibility.

"I have been having conversations on and off with Magna Entertainment, and I know that they are vitally interested in coming into the Detroit market," said Scranton. Magna, she said, has gone as far as to draw up architectural plans for a new facility.

Michigan Racing Commissioner Annette Bacola confirmed Magna's interest.

"It's my understanding that they are looking at several sites for a full entertainment facility that would include horse racing," Bacola said.

Video gaming, which has led to significant purse increases at racetracks like Woodbine and Delaware Park, is a sticking point.

Engler is on record as opposing slot machines at racetracks, and while Scranton said she is "speaking with the administration" on the issue, it is not clear whether Magna officials would balk at constructing a new facility without video gaming.

"I had a meeting about a year and a half ago with the governor and (Magna Chairman) Frank Stronach where Stronach said, 'I don't have slot machines in any of my other tracks, and that's not my main objective here.' "

Bacola said that at the time, Stronach indicated that telephone account wagering and off-track wagering were Magna priorities. But video gaming can generate huge revenues, and the inability to get slots led Ladbroke to close Detroit Race Course and sell the Livonia property in 1998.

Thoroughbred racing moved to Great Lakes Downs in western Michigan in 1999. The track, a former Standardbred facility, has struggled given its remote location.

"Without question, Ladbroke would've stuck around and flourished with additional gaming at DRC," said Sam McKee, formerly head of public relations at the defunct track. "Trying to compete with the casinos was like racing a Chevette in the Daytona 500. All we wanted was the opportunity to be competitive and to have a level playing field."

McKee, who now is an announcer and television host at Meadowlands in New Jersey, said video gaming has been a panacea at every racing operation in North America where it has been allowed.

"Michigan lost several thousand jobs and has basically crippled the equine racing industry to the point where it is a struggle for any horseman to stay in the game," McKee said. "Frankly, it's a shame the racing industry, both Thoroughbred and Standardbred, had to practically collapse when such a simple solution was readily apparent."

Video gaming got a big boost in early July when L. Brooks Patterson, the powerful Oakland County Executive, came out in full support of slots at racetracks as a partial solution to the state's financial problems.

"Electronic gaming provides a solution for the budget shortfall that requires no tax increases or program cuts," Patterson said. "This is a better way to deal with the state's budget shortfall than raising taxes on our citizens. Electronic gaming will level the playing field by allowing racetracks to compete on even footing with casinos."

But Bacola said that in view of the governor's stance, and strong opposition from the three downtown Detroit casinos that opened in 1999-2000, she thinks the video gaming portion of the legislative package faces an uphill battle.

"(The casinos) have an army of lobbyists," she said. "Even if everyone was on-board with this--and they're not--we'd have a heck of a time getting this through. Those casinos in downtown Detroit do not want slot machines at the racetrack."

Bacola said she had faith in resiliency of Michigan horseracing even if no legislation is passed.

"I'm the eternal optimist about horse racing," she said. "I think the industry will survive because it's a dynamic sport and it can stand on its own two feet."

Scranton is not so sure. She said she sees no one on the horizon to pick up the ball if the legislation fails in the fall session.

"If we don't do it now, it's five to seven years down the road, and I frankly don't know if the industry will be here five to seven years from now," Scranton said.