Five reasons why Michigan’s Thoroughbreds should look west

As of right now, the Thoroughbred racing business in the state of Michigan is an industry without a home track to call its own.

While the clock ticks down to the summer racing season, the state Attorney General’s office is taking its sweet time deliberating on whether Pinnacle Race Course is worthy of its conditional racing license. Meanwhile, any immediate alternative (Mount Pleasant Meadows, one of the state’s three harness tracks) will take time to build up into the kind of facility needed to host a meet of the Thoroughbreds’ caliber. Until a decision is made, it is difficult for the decision-makers in Michigan’s racing industry to pull the trigger on either option.

From this writer’s perspective, Pinnacle is at best a 50-50 proposition for opening its doors in 2011. The Detroit-area track closed down all of its operations at the end of last year’s meet under a mountain of debt from municipalities, tax collectors and simulcast providers. Even the track’s website has been offline for over a month, now. A recent story by Crain’s Detroit Business about a looming job-creation audit by Wayne County only heaps more on the pile.

Perhaps it is too soon to simply give up on Pinnacle as a long-term home for Thoroughbred racing, but with the track’s unstable past, present and future, it is not beyond the realm of possibility to consider an alternative.

On the Michigan-Bred Claimer Facebook page, I asked readers where they thought the 2011 Thoroughbred meet would be held, where they would like to see it held and where the long-term future of racing may rest. When presented with the options currently available, the conversation quickly shifted to building a new track in a centrally located area – Grand Rapids or Lansing. Looking at the current situation, it is not hard to agree.

Clearly, this idea is little more than a pipe dream. Pulling it off would mean convincing another wealthy investor that horse racing in Michigan is worth the risk, which at this point is admittedly a hard sell. This, along with a litany of other factors, would make the idea difficult-to-impossible. The following discussion is strictly hypothetical. However, if done correctly, a move west could help drastically improve the health of the state’s industry.

Another aspect discussed in the Facebook conversation was combining the breeds at said centrally located track. From an exposure standpoint, the harness tracks are doing just fine in Detroit. Keeping them there keeps the simulcast dollars flowing in their area. However, it would not be difficult to transition the Quarter Horses and Arabians to this imaginary track, as well.

Before I continue, I realize this plan flies in the face of my 3,000-word manifesto against the contraction of small tracks, effectively shuttering the two tracks I was trying to defend. Don’t worry, I have a plan.

Pinnacle and the proposed track cancel each other out, so there is no loss there. Mount Pleasant would be gutted with the loss of Quarter Horses and Arabians. However, the track represents the only pari-mutuel outpost in central and northern Michigan, so it is important to keep around. Plus, with the track suddenly much closer, there may be more interest to watch the races via simulcast in Mount Pleasant by those who can not make it to the live races every day, but want to play and keep tabs on the track.

To keep the simulcast going, the new track would split itself into a spring/summer and a fall meet, divided with a short mixed breed meet at Mount Pleasant to coincide with the Isabella County Fair. Mount Pleasant gets exposure at a time when the most patrons are on the property, the simulcast can stay open all year, and there is incentive to keep the track up to code to use as a training center. Damage is minimized and everybody wins.

Want to keep Pinnacle in the mix? Give Pinnacle and the new track each one of those meets, then either give Mount Pleasant back the mixed meet horses to run their usual schedule or keep the county fair plan. That way, Pinnacle can continue to stay in business, it gets some time off to ease the cost of hosting a live meet and perhaps it can finally work on finishing the “Phase Two” construction.

Both Grand Rapids and Lansing are viable and acceptable options for such a venture, but there are a few factors that make the state’s capital city particularly attractive in this scenario. To illustrate this, I have outlined five reasons why a move to Lansing might be in the best interest of flat racing in Michigan.

Keep in mind, this is not a call to shut down any track, but simply a scenario to consider in the wake of current events. It’s always better to have a plan than not.

The five reasons why Michigan should consider a racetrack in the Lansing area can be found behind the jump.

1. It’s Still an Urban Area

One of the big draws of moving to Detroit was supposed to be its location in the biggest urban area the state has to offer. More people should mean more money going through the windows. Moving from Muskegon, a town with less than 100,000 residents, the live handle has hardly improved at all in the long-term – definitely not in proportion to the population hike.

Here are the average per-day live handle figures for the last two years at Great Lakes Downs and the first two years at Pinnacle, according to the Michigan Office of Racing Commissioner/Gaming Control Board’s annual reports.

2006: $23,692.85
2007: $20,752.80
———- GLD closes, Pinnacle opens ———-
2008: $44,086.67
2009: $29,009.81

The first year’s daily live handle at Pinnacle doubled itself, but once the newness wears off, the number sinks back down to a hair above GLD levels. The 2010 figures are not yet available, but there is little to suggest the drop was an aberration.

Lansing is Michigan’s 5th largest city, with a population of around 115,000. If college students do not factor into that number, it jumps another few tens of thousands. Lansing is comparable in population size to Erie, Penn., home of Presque Isle Downs; pretty close to the Evansville, Ind./Henderson, Ky. area of Ellis Park and bigger than any city in West Virginia or Delaware. The city is plenty big enough to sustain a racetrack. If it is run correctly, the size of the host city is all but irrelevant (Within limitations, of course. A racetrack in the Upper Peninsula is probably too far away from civilization to be successful, but I could be wrong).

If anything, building in a mid-sized city could create a more intimate community atmosphere at the track. Build it on the edge of town headed toward Grand Rapids, the state’s second largest city, and it might even draw some fans from that region, as well. If it is marketed to them correctly, they will come.

2. The Territory is Less Hostile

There is little question that Pinnacle was built in the middle of a hornet’s nest. Two harness tracks reside in Detroit that more than likely don’t appreciate the new competition. Three casinos reside in Detroit that definitely don’t appreciate the new competition. Tribal casinos are trying to gain a foothold in the region, as well. All of that goes away with a move west.

The concentration of casinos is significantly lower in the Lansing area than Detroit. Aside from perhaps the FireKeepers Casino in Battle Creek, no tribal casino has a legitimate complaint that a racetrack in the area would infringe on their turf. With so many gambling options in the state, the key to operating a successful gambling venture is finding out where gambling is not already at the saturation point and building there. That philosophy is magnified if and when it comes time to expand into a racino.

3. Proximity to Michigan State University

One of the biggest burning questions that plagues the racing industry is how to attract new, young fans. The easiest way to achieve this is to target those most likely to become fans and work outward from there.

Where in the state of Michigan is there a more concentrated population of young people interested in the agriculture and equine industries than the campus of Michigan State University in East Lansing?

There are several directions to go with this. First, there is the obvious marketing angle. “College Days” are popular at tracks in university towns, and there are few things college students like more than cheap beer. If done correctly, there are plenty of ways to get the students to turn out.

Second, MSU is a campus filled with young people looking to pursue a career working with animals. There is doubtlessly a good number of able, educated students who would be willing to do grunt work on the backstretch for cheap. Even better, call it an internship and have them work for free. These students could very well be the next generation of Michigan horsemen. A strong relationship between the track and the school could someday even lead to the formation of a racetrack industry program, similar to that of the University of Arizona. A tie-in with MSU could mean some state money coming the track’s way, which never hurts.

Even better, students come to MSU from around the country. When they go home, they expose their friends and family to tales from the track, generating a wide network of buzz. Perhaps those friends and family don’t bother to make the trip to Lansing to see the races in person, but if the track should be playing on a screen in the corner of a simulcast hall on Derby day and they decide to give it a shot, that’s a few bucks Michigan didn’t have before.

4. Proximity to the State Capitol

Want to get the attention of the decision-makers in Lansing? Build a track in their backyard. An issue is harder to ignore if elected officials have to drive by it every morning. At the same time, contact between horsemen and elected officials would be easier than ever. With both groups in the same town, exposing your state congressman or congresswoman to horse racing would go from a full day’s investment driving to and from Detroit to a leisurely afternoon or evening just down the road. Plus, horsemen would have one less excuse to stave off visiting their politicians and speaking to them one-on-one. I’ve found members of Michigan’s racing industry have gotten better at this, but there is always room for improvement.

A move to the Lansing area could also help tip the dominoes toward a move back to the Department of Agriculture from its current home in the Michigan Gaming Control Board. Right now, Pinnacle is in a fairly convenient location for the Detroit-based Gaming Board, whose primary duty is oversight of the three downtown Detroit casinos. Moving a track with a long meet out of that bubble is one more straw on the “racing is not worth the trouble” camel’s back. Suddenly, the short drive from the Ag Department’s office looks like an easy way for the Gaming Board to shed a burden it probably didn’t want and for the racing industry to transition back to an office that better fits its needs and purposes.

5. Potential for Night Racing

By moving back to Detroit, Pinnacle made itself subject to Michigan’s “6:45 Rule”, prohibiting the track from conducting night cards without permission from the other two Detroit tracks. Here is the official language…

Unless a different agreement is reached by all the race meeting licensees in a city area, a race meeting licensee shall not conduct a live thoroughbred horse race after 6:45 p.m. on any day except Sunday. Unless a different agreement is reached by all the race meeting licensees in a city area, a race meeting licensee shall not conduct a live standardbred horse race before 6:45 p.m. on any day except Sunday. Notwithstanding the 6:45 p.m. time restrictions, the commissioner, upon request by a race meeting licensee, may grant to the race meeting licensee a race meeting license authorizing any of the following:

(a) The licensee to conduct live horse racing programs that would otherwise be prevented by the 6:45 p.m. time restriction, if no other race meeting in a city area is licensed or authorized to conduct live horse racing at the same time the licensee proposes to conduct the requested live horse racing programs.

(b) Waiver of the 6:45 p.m. time restriction pursuant to the written agreement of all race meeting licensees in the city area.

– Horse Racing Act of 1995 – Section 431.310

At Great Lakes Downs, weekday evening racing was the track’s bread and butter. It’s a proven method for smaller tracks. One only needs to look south to Indiana Downs, who not only runs live on weekday evenings, but schedules their biggest races early in the week. The competition for simulcast bucks is lighter, people with jobs are out of work for the day and connections at many other tracks are freed up on dark days, or at least done for the day at their home base. Indiana Downs broke its single-day handle record twice last year. Both were on Wednesdays. The successful movement toward night cards at Turfway Park and Churchill Downs only provides further evidence for the argument.

Since moving to Pinnacle, the track has had to go head-to-head with the nation’s marquee summer meets for the eye of the simulcast player. Judging by the number of tracks I have seen in my travels offering the Pinnacle signal (Very few. None in Kentucky or at Arlington Park), the track is not winning that battle. According to the Horseplayers Association of North America’s 2010 figures, Pinnacle earned a failing “E” in simulcast signal distribution.

Truthfully, it is hard to blame simulcast operations for not wanting to pick up Pinnacle’s signal. As much as I love racing in Michigan, there are probably over 10 Thoroughbred tracks that are more attractive from a betting standpoint on a Saturday afternoon in August (Let’s try this: Saratoga, Del Mar, Arlington, Ellis Park, Hoosier Park, Woodbine; arguably Presque Isle, Prairie Meadows and the two West Virginia tracks. That’s 10 right there). With a mid-to-low quality racing product, it is not hard to get lost in that shuffle. The track’s apparent troubles paying its simulcast bills does not help matters, either.

With no other tracks to object, moving to Lansing would free Michigan’s Thoroughbreds from the 6:45 rule. All of a sudden, the exact same racing product becomes a much more attractive simulcast option for tracks. Bigger handle means more money for the purse structure, which makes everyone better off.

No one knows how the situation in Michigan is going to shake out, but in the event that Pinnacle cannot continue, Lansing looks like an ideal spot to start over once again.