The Michigan Gaming Control Board has released its annual report to the Governor regarding horse racing in the state.
The report examines the wagering-related revenues and tax money generated by each of the state’s five racetracks, as well as a very basic overview of the Gaming Board’s horse racing activities, revenues and expenditures.
To read the Michigan Gaming Control Board’s 2010 report on horse racing, click here.
As time allows, I will be analyzing the trends in Michigan racing over the last decade, based on information provided by the state’s annual reports. Subjects will include statewide figures, Thoroughbred racing, Mount Pleasant Meadows, and perhaps the harness tracks.
Until then, feel free to discuss your thoughts on the latest report.
The Michigan-Bred Claimer 
No thoughts but questions.
With HP and Northville’s live handle being so much more per day than Pinnacle makes me wonder what is live handle. Where does a Thistledown simulcast bettor’s money go when wagering on Pinnacle. Is it counted as live wagering? An ADW bettors money?
For Hazel Park to have almost 2.4 times the daily live handle as Pinnacle makes me think that probably HP gets a boost from more sites carrying their signal and that “live handle” doesn’t mean money bet by bettors at Hazel Park.
A bettor at Hazel Park bets $10 on a horse at Pinnacle. Is that counted as live handle?
In the DRF the closing day live handle for Pinnacle was listed as $24,167 and a second figure was listed as $70,666(total?). Anyone know where this money is bet?
That’s a good question. If I were to venture a guess, I’d say simulcast wagers at other tracks would count for the “live” column. That’s where it would seem to fit best.
However, I started looking through older reports for some kind of definition for “live” and “simulcast” handle, and came across something interesting. Check out the bottom of page 10 for the 1999 report…
Click to access orc99ar_6099_7.pdf_MDA.pdf
The way they make it sound, out-of-state-based simulcast bets don’t count toward either of the figures. The total is larger than the live figure, and it explicitly states that it’s not part of the simulcast figure.
I got to thinking, and really, the state is probably most concerned with the wagering that is happening in its own state – the money that is changing hands through Michigan’s mutuel windows. It is odd, though, that the out-of-state figure aren’t better defined.
I took a quick look ath the revenue of the MCGB and it seems to me the revenue they receive far exceeds the expenses. Hence, why is t so hard to get rcingdates in Michigan
Interesting figures. I also can’t help but notice that while it may pale in comparison to the casino money, the state nevertheless comes out in the black regarding the parimutuel taxes. Why then do they balk at furnishing judges, veterinarians, etc. for the race meetings?
That 1999 report is an emotional bummer. No more Jackson Raceway; No more Great Lakes Downs; no more DRC; no more Saginaw; and what is left is on life support.
It is indeed…interesting…that the Gaming Board can cry poverty with such a vast difference between income and expenditures. If I were any kind of reporter, I’d inquire about this.
I think the most depressing thing about the differences between the ’99 and ’10 reports is how stripped down it has become. The earlier reports have so many details about the industry in Michigan and what it means to the state outside of the numbers. It feels like there was an element of pride taken in putting it together. The recent report has the track reports, tax figures, a bare-bones description of the MGCB’s figures and that’s about it. It feels like an afterthought, but really, what has racing in this state become, if not an afterthought?
There is actually three types of handle that is tracked:
Live Handle, Export Handle & Simulcast
Live handle is betting on the live product at that particular track, export is the betting done on that particular track’s sending OUT of their signal on their live product and simulcast is the betting done at that particular track on other tracks. So in Hazel’s case, the live would be on the harness meet currently racing there and the export would be the monies bet from other tracks on Hazel’s live product. Simulcase would be the monies bet at Hazel Park on other tracks from out of state. Hope this helps.
June, that is also interesting. So let’s say I was down at Turfway and made a bet on a Hazel park race. Who gets the pari mutuel take on that money?
I assume that Hazel gets some; Turfway must get something; Does the state take-out go to Kentucky? Does Michigan share in any of that? It sounds like maybe not, since the venue of the bet is Kentucky.
Like wise if I go to bet the Belmont at Northville Downs, Belmont must get some of the juice. Michigan obviously gets a piece; Norhtville gets some and does the state of NY get anything?
Just for the heck of it, I scanned the Horse Racing Act of 1995 to see if it had anything to say about how out-of-state simulcast money is handled. Mind you, it was a VERY quick scan, but this was the best I could find.
Excerpt from Sec. 18, (6)…
“A race meeting licensee that transmits simulcasts of its races to locations outside this state shall pay 50% of the fee that it receives for sending the simulcast signal to the horsemen’s purse pool at the sending track after first deducting the actual verified cost of sending the signal out of state.”
Not terribly helpful. Let me keep looking.
The full Horse Racing Act of 1995 can be read here: http://www.michigan.gov/documents/mgcb/HORSE_RACING_LAW_OF_1995_310534_7.pdf
Old Time Race Fan, some of this gets confusing but keep in mind Where the bet was made. For instance in your example, if you were at Turfway and made a bet on HP, that would be considered “Export Handle” to HP. Turfway keeps the bet and sends a “commission” to HP. The commission is negotiated between tracks and contracts are signed before the meet begins. The smallest commission that HP retains is on Export, just pennies on a dollar. Likewise, commissions on simulcast is negotiated between tracks and contracts are in place. Again, the state where the simulcast bet is made only gets a small commission, larger than Export but way less than than live. When a track has a live meet in Michigan, after the monies are paid to bettors, the “profit” is split between the track where the meet is and the horsemen of that breed. For example, if you make a bet on the live meet Friday night at HP, after paying off bettors, money is split between HP and the harness horsemen. When Pinnacle was racing, they would keep their profit and split with their thoroughbred horsemen. On a simulcast bet, one placed at let’s say HP and bet on Turfway, there is a tax paid to the state of Michigan, bettors are paid, a fee sent to Turfway (agreed upon by contract) and the balance is split part to the track (Hazel) and split between the Thoroughbred horsemen in Michigan and the Harness horsemen in Michigan. There is no state tax on live in Michigan. I believe the tax on simulcast in Michigan is something like 3 1/2%. But the state does not really get this money in the literal sense. They collect the funds and then 100% of the tax is deposited in the Michigan Agriculture Equine Development Fund and used to fund various horse related items. The Office of Racing Commission (Now Casino Gaming Oversight), the Laboratories for testing, Thoroughbred Sire Stake Races, Breeders and Owners Awards, Harness Colt Stake races at fairs and the tracks, Harness Breeder’s Awards, Sire Stakes and their Futurity Races mainly. The state actually never sees a penny of this tax dollars for the state’s own use unless you consider the cost of oversight (Racing Commission or whatever they call it now) as state use. Every year when the state of Michigan does their budget, they put aside a percentage of the Ag Equine Funde (based on what they think the tax will be) for the Racing oversight and lab testing. But in the last few years, the actual costs of the Gaming Control Board and labs has been more than was appropriated and this is why they come back to the horsemen to pay the difference. I think the MIHBPA has been advocating for some time that they should take the cost of oversight off the top of the Ag Equine Fund and what’s left is used for breeders, colt races, etc. But the effect would be the same, only different areas of racing would pay. I believe under this scenario the harness people would pay more because they get so much more of the Ag Fund for their use.
June
There is a 3 horse race at Pinnacle. At Pinnacle there is $100 bet on each of
the 3 horses. At Turfway a bettor bets $10,000 on one of the horses. That is the entire pool. No other bets on the race. The horse with $10,100 wins. A minus pool of $205(I think). Who takes the hit on that?
Thanks June. It is starting to make sense. While complex, your expanation sure helped. When I was a kid the only place to bet the Belmont Stakes (legally) was at Belmont. Maybe Las Vegas. Now we have a bigger pie since I can bet the race in numerous locations. However sometimes the pie gets split into awfully small pieces.