Michigan Targets Account Wagering Companies

Top officials in Michigan said an investigation has revealed that pari-mutuel wagering companies have illegally accepted wagers from Michigan residents by telephone or through the Internet. The companies have been sent "warning letters," the officials said.

A release from Michigan attorney general Jennifer Granholm said Youbet.com of California and The Meadows in Pennsylvania were "actively encouraging Michigan residents, through mailings and software, to wager on horse races. Investigators were also able to place wagers on horse races conducted here and in other states."

A letter also was sent to Magna Entertainment, which recently closed a deal to buy The Meadows from Ladbroke Racing. The deal includes the harness track's Call-A-Bet system.

Michigan law prohibits off-track wagering of any type. "Failure to abide by the law will result in charges against these firms," Granholm said in the release.

Annette Bacola, Michgan's racing commissioner, said telephone and Internet wagering are "responsible for a significant amount of lost revenue" for the state. Officials said they also have tracked "illegal wagering" by non-residents on races conducted in Michigan.

Magna Entertainment, headed by Frank Stronach, owns Great Lakes Downs, Michigan's top Thoroughbred track. There has been talk from time to time that Magna may attempt to build a racetrack in the Detroit metropolitan area.

New Jersey officials have taken similar action against wagering companies that have solicited business from residents. There is no legislation on the books in New Jersey to authorize telephone or Internet betting.