Historical Horse Racing Bill Gets New Language, Out Of House Committee

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On Wednesday, the Michigan House Ways and Means Committee made progress by advancing gaming bills that would permit multi-state online poker and historical horse racing.

The gaming bills in Michigan were swiftly initiated by lawmakers during the initial days of the lame-duck session.

Chairman Brandt Iden proposed a House substitute for S 661, which pertains to the historical horse racing (HHR) bill.

On Tuesday, the House Regulatory Reform Committee easily approved Sen. Curtis Hertel Jr.’s proposed amendment to the Lawful Internet Gaming Act, which would permit Michigan online poker to participate in multistate pooling. The bill also encountered no obstacles during its consideration in Ways and Means.

With the momentum to pass before the end of the year, both bills have progressed to the House floor.

Changes to historical horse racing bill

S 661, which had been stuck in the House for almost a year after its approval in the Senate, seems to have regained momentum. Due to strong opposition from casinos, the legislation was excluded from the bundle of gaming bills that were passed in Michigan back in December.

Last year, Iden collaborated closely with Michigan’s casino and tribal gaming sectors on the legislation that legalized sports betting and online casino gaming. As a result, he was an excellent choice to mediate and find a solution to convince casinos to withdraw their resistance to HHR.

Some of the key changes to the bill are:

• The racetrack is restricted to a maximum of 500 HHR machines.
• Adjusted gross revenues are subject to a tax rate of 19%, while wagers are taxed at a rate of 1%.
• The yearly cost for the license is $50,000.
• To ensure clarity, the definition of pari-mutuel wagering should be expanded to explicitly exclude banked games or wagers made against the operator.
• In order for a licensed racetrack to provide HHR, the local government must pass an ordinance granting permission for the activity to take place.

Committee looking to tie-bar three bills to HHR

In the span of one week, Iden proposed three amendments to existing laws in addition to the HHR bill.

These proposals aim to:

1. The proposal is to revise the Lawful Sports Betting Act by reallocating the current 5% tax revenue, which is currently allocated to the Agriculture Equine Industry Development Fund, to be redirected towards the Economic Development Corporation.
2. The removal of a provision in the Michigan Gaming Control and Revenue Act, which permits video lottery at racetracks, would enable casinos to request permission for simulcasting horse races.
3. Revise the Lawful Internet Gaming Act to specify that it excludes “internet sports betting under the Lawful Sports Betting Act” instead of “any lawful internet sports betting.”

In order for the HHR bill to pass, all proposals must be tie-barred together.

Racing industry can live with changes

Sponsors view the HHR bill as imperative for the survival of the declining horse racing sector. With only one track remaining operational in Michigan, lawmakers have an opportunity for the establishment of another track, pending the authorization of HHR.

Iden did not consult the Senate sponsors of the bill regarding these changes, according to their statement to Playinmichigan.

After receiving the language from Playinmichigan, Sponsor Sen. Dan Lauwers engaged in a discussion with racing stakeholders. Their feedback indicated that they believe they can achieve success with the proposed limitation of 500 machines.

Lauwers stated that during his discussion with industry representatives, they expressed a desire to witness an increase. However, they agreed that if it is necessary to kickstart the process and gain the support of casinos, they are accepting of that.

He further stated that the horse racing industry is able to sustain itself with the current tax rate and licensing fee.

Lauwers expressed his enthusiasm for the chairman’s decision to address this matter, emphasizing that it is definitely preferable to ignoring it. He couldn’t help but speculate that this bill might be subject to negotiations during the lame duck period. Lauwers expressed his hope that the House can pass the bill promptly so that they can thoroughly examine and discuss its content.

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