Who knew all Michigan racing needed to get Lansing on its side with alternative wagering was a major economic collapse and a budget deficit the size of Montana?
The Michigan HBPA website reports…
PULL TABS AT RACE TRACKS: As the state scrambles to complete the budget process for 2009-10, discussions have centered around allowing tracks to offer “lottery pull tab” machines to generate needed state revenue and assist the tracks in the challenge to stay in business. The MI-HBPA has supported for years additional gaming at the race tracks and are very interested in working with Lansing to develop a comprehensive plan for additional gaming. As expected, the “pull tab” proposal must follow the requirements set in the passage of Prop 1 in 2004. Pull tabs, as well as, VLT’s will need local and statewide approval.
The MI-HBPA is currently working on proposals for VLT’s and internet account wagering (ADW’s) on horse racing to assist in saving our industry. As the challenges grow with the approval for VLT’s in Ohio to maintain our horse population, we look forward to working with Lansing to get it right. Serious efforts need to be coordinated to develop a comprehensive package to generate state revenue and the needed revenue to save the racing industry.
A comprehensive plan will offer the state millions and save an industry with a 76 year history of being a producer without the need for state subsidies. The racing industry is willing to work with the state to support a much higher take than currently offered by the casinos throughout the state, at least double. The MI-HBPA is committed to working with all parties in developing a fair plan for all as we face extinction.
Additional gaming that belongs in a comprehensive plan:
1) VLT’s at all race tracks as Ohio, Penn, Indiana and West Virginia
2) Advanced Deposit Wagering (ADW’s) internet wagering on horse racing in Michigan currently is projected to be 60 million dollars, money leaving the state to wager on horse racing and the state, horsemen and tracks gain -0- from the activity, because wagering on the internet in Michigan on horse racing is illegal. So, it goes on with no controls, no revenue and continues to grow nationally. One ADW company in Michigan has enjoyed over a 50% gain in the first quarter of 2009 while our simulcasting wagering is in a nose dive and industry all but gone.
3) Intstant Racing machines to allow wagering on archived races.
Basically, with the race tracks involved in the gaming business, they should be allowed to compete fairly for the gaming dollar and offer any game that any competitor offers. Competition is good for the consumer.
While Pull Tabs would certainly be a welcome addition to Michigan’s racetracks, hopefully the state does not see them as a way to appease the industry and stop there. Pull Tabs are indeed very entertaining. I myself am a frequent player when I visit my local bars and dining establishments. However, Pull Tabs must be seen as a first step toward bigger and better things, not an ultimate solution. Pull Tabs are more of an impulse item, while casino-style gaming is a destination. Still, anything to boost the purse structure will be greeted with open arms.
One thing that strikes me as odd about the push for Pull Tabs is it appears the tracks must adhere to the demands of Proposal 1 to install the machines. However, if my memory serves me correctly, the Pull Tab machines in my local establishments were installed well after the 2004 election without any kind of electoral hubbub. Proposal 1 was written to stop Racinos, but I was under the impression it applied to everyone not granted immunity by its language. Surely the racing interests have people on their side better versed in the intricacies of Prop 1 than myself, but if the Double 6 bar in McBride, Michigan can get Pull Tabs without anyone raising a fuss, there is little reason to treat racetracks differently.
In related news, it appears Gov. Jennifer Granholm is (finally) on board with the possibility of implementing alternative wagering. Granholm was on WWJ Newsradio 950 Thursday to discuss placing an expanded gaming issue on a future ballot to help preserve the state’s education programs, namely scholarships for college students and laid off workers returning to school. The interview and a small write-up can be found here.
While having the governor publicly support the cause for expanded gaming is definitely a big positive for the movement, forgive me if I take a “wait and see” approach to her statements. Granholm’s track record with the racing industry has been less than stellar during her time in the executive position, most recently shooting down a bill to help restore supplemental funds to Michigan’s horsemen. Cuts like these would have been much easier to swallow if the governor had shown the same openness to expanded gaming then as she is now.
Until the talk turns into action, I approach all of these developments with cautious optimism.
For additional coverage on Gov. Granholm’s newfound support of racinos, a WLNS Channel 6 feature focusing on Sports Creek Raceway can be found here. The link to the video is in the upper left hand corner.
Racino states draw breeders
A good indicator of the racing industry’s health in a given state is the number of mares it sends to the breeding shed.
This is a factor I try to illustrate whenever I explain Michigan’s situation to those unfamiliar with the industry. Because I am a strong believer in visual aids when giving a presentation, I decided to put together a chart to describe the breeding industry in the state of Michigan, compare it to other states in the region and explain the impact of alternative wagering on everyone involved.
It is no secret that horsemen are flocking to states with casino gaming at its racetracks. The fact will inevitably be brought up in any discussion about alternative wagering in a state that lacks it. However, the point is driven home when the figures are in clear sight.
Let’s have a look at the chart…
Thoroughbred Mares Bred in the Great Lakes Region by State, 1998-2009
X Axis = Year; Y Axis = Mares Bred *2009 figures are current as of 10/13/2009. Some reports are still yet to be received by the Jockey Club.
For a more detailed breakdown of the year-by-year breeding totals, a spreadsheet of the above data may be read here.
So what can we learn from these figures?
First and foremost, breeders are taking their mares where their foals can make the most money. The top three states listed in this sample are “racino states” (Because of its clear breeding advantage in the region, Kentucky was not included in the sample). The increased purse structure that comes with expanded gaming not only gives the horses themselves the best chance to earn a good living, it trickles down to the breeders in the form of incentive programs.
Also worthy of note is that in 1998, two of the three leading states (Indiana and West Virginia) actually bred fewer mares than Michigan. Today, both states breed several hundred more.
The clear exception to this rule is West Virginia, whose figures have actually decreased since installing full-blown slots in 2006. Two factors may be responsible for this. First, West Virginia installed slots at the same time as neighboring Pennsylvania. The 2007 debut of Presque Isle Downs, about 135 miles away from Mountaineer, also helped draw horses out of West Virginia. Second, the breeder’s incentive program in Pennsylvania is quite lucrative. Boosting the purses only made it that much juicier. Here, have a look for yourself…
Breeder’s Incentive Programs in the Great Lakes Region by State
However, West Virginia enjoyed a major boost throughout the first half of the decade. It was the first state in the region to adopt expanded gaming in 1999 when it installed coin-operated video lottery terminals. With the help of the VLTs, West Virginia pulled itself up from the dregs of the racing world to the point where the state actually led the region in mares bred in 2004. Despite the recent dropoff, West Virginia remains well ahead of the game from where it began.
Another conclusion that can be drawn from the data is racino states are drawing mares away from non-racino states. The poster child for this observation is Ohio, a state flanked by one armed bandits in Pennsylvania, West Virginia and Indiana. Eleven years ago, the Buckeye State accounted for a comparable number of mares bred to Pennsylvania and was well ahead any of its other neighbors (excluding Kentucky).
As more and more states allowed its tracks to install casino-style gaming, the breeding totals in Ohio began to plummet. In 2009, the state is in danger of breeding fewer than 200 mares, a figure that would have seemed unheard of less than a decade ago.
Other states in the region without any forms of alternative wagering, Illinois and Michigan, have also seen significant drops as their neighbors reaped the benefits.
Once the cornerstone of the Great Lakes region, Illinois has seen its breeding totals cut in half over the last decade. Michigan’s drop off has been just as drastic, with a decrease of over 40 percent in the last year alone.
As these figures demonstrate, the benefits of installing alternative wagering are quite apparent on the breeding industry of that state. The increased purses and breeder’s incentives make them attractive places for horses to send their mares, which in turn improves the reputation of that state’s racing industry. At the same time, neighboring states without expanded gaming will be adversely affected as its horsemen migrate to states where they can make the most money.
Racinos have the ability to shift the balance of power in a region. It is time for the state of Michigan to decide which side of the scale it wants to sit.
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Tagged as Alternative Wagering, Breeding Statistics, Illinois, Michigan, Minnesota, Mountaineer, Pennsylvania, Presque Isle Downs, Racino, West Virginia