Michigan Notebook: April 7, 2010

I’ve got all sorts of stories and photos from my recently concluded trip to Kentucky, but until I get everything sorted out, here is a rundown of happenings in the state during my absence.

– The Detroit News prominently featured a story about the decline of harness racing in Michigan and the ongoing investigation of race-fixing at the state’s tracks. Among those interviewed for the story, written by Francis X. Donnelly, are Michigan Harness Horsemen’s Association president Brett Boyd, executive director Dan Rakieten and former deputy racing commissioner Tom Dorsey.

The story touches off on many of the key issues currently facing Michigan racing: expanded gaming, slashed race dates (though it strangely omits the part about the Gaming Control Board further cutting the dates to a single-digit number between four tracks) and the migration of the gambling dollar from the racetracks to casinos and the lottery. However, the most interesting, and hard-hitting, part of the story comes from its final paragraphs, which showcase the potential self-defeating prophecy behind the charity poker room at Northville Downs.

The track added the poker as a way to lure a younger generation to the racing. But the card players didn’t seem interested.

Except for glancing at one of the track TV screens, Mike Robinson has never seen a race. It didn’t look all that exciting, he said.

“I never thought about it,” the 32-year-old Dearborn resident said about becoming a racing fan. “It’s not as fun as poker.”

– The Detroit News reports Mount Pleasant-based lawyer John W. Parrott pleaded guilty in a Portland Ore. court last Thursday to “one count of conspiracy to defraud the United States using a fraudulent tax shelter via leasing Thoroughbred mares.” He faces up to five years in prison.

Parrott holds several high-ranking positions with GeoStar Corp., a former gas and oil exploration agency in Mt. Pleasant. Geostar was the parent company of ClassicStar LLC, which the Mt. Pleasant Morning Sun reports had operations in states including Michigan, Kentucky, Utah and Florida. The company’s “mare lease program” offered the opportunity to to invest in Thoroughbred breeding by leasing out mares to be bred. The program was sold by telling investors it would reduce or eliminate their income taxes, which resulted in a tax loss to the federal government of over $200 million. Aside from tax fraud, the Morning Sun also reports ClassicStar may have sold more shares of the lease program than it could actually support.

It appears this is far from the first time ClassicStar has found itself in court regarding its mare lease program, as the Blood-Horse reported on a similar case in 2007. Be sure to check out all three links for more details on this complicated situation.

– Pinnacle Race Course was ranked 68th, second to last, in the Horseplayers Association of North America’s 2010 Track Ratings. The ratings compare major Thoroughbred racetracks in North America by factors pertinent to horseplayers including takeouts, field size, variety of wagers and simulcast signal distribution. Pinnacle was assigned a “D-” grade by HANA, only better than Winnipeg, Manitoba-based Assiniboia Downs, which was given an “F”. Keeneland Race Course was awarded the highest grade of a “B+”. I intend to examine these ratings, and Pinnacle’s place among them, at a later date, but until then, here are the figures used by HANA to determine the rankings.

Michigan industry leaders discuss unity, upcoming issues

Accomplishing the collective goals of Michigan’s racing industry will be easier if its factions work together, stated the common rhetoric of speakers during an industry meeting last Friday at Pinnacle Race Course.

Representatives from Michigan’s racetracks and horsemen’s groups, as well as the Office of Racing Commissioner and other members of state government, met under the track’s patio to make connections, discuss the direction of racing in the state, and introduce newly appointed Acting Racing Commissioner, Patricia Lockwood.

After recent announcements by Gov. Jennifer Granholm rekindled the possibility of alternative wagering in Michigan’s racetracks to help close Michigan’s gaping budget deficit, there was much to discuss.

The event, largely organized by breeder Ron Fitzgerald, was hosted by Pinnacle owner Jerry Campbell.

Campbell encouraged those in attendance to contact their state representatives and inform them of the benefits Michigan’s racing industry can have for the state’s economy.

“We want to work hard with our leaders in Lansing to see if we can get something done and help solve the budget crisis,” Campbell said.

Michigan Harness Horsemen’s Association President Brett Boyd said he called Campbell, among many others, shortly after hearing about Granholm’s statements.

“My message to Jerry was I think we need to strike while the anvil’s hot,” Boyd said. “The opportunity is absolutely at our fingertips.”

Throughout the meeting, speakers discussed the immediate goal of implementing instant racing terminals with the long term goal of full-fledged racinos. Campbell said these additions could potentially quadruple purses at the state’s five racetracks.

However, an old foe stands in the way.

“Unfortunately, Proposal 1 is one of the most magnificently drafted pieces of legislation ever,” Boyd said. “It creates a lot of hurdles and obstacles for our businesses.”

Despite this challenge, Boyd was optimistic the state’s budget situation could be the factor that tips the scales in the racing industry’s favor.

“Never in history, and I’ve been around a while, have I seen the appetite of our state reps be so willing to help,” he said. “And now they have a problem we can help them solve.

Other speakers included the following:

– Patti Dickinson, Michigan Thoroughbred Owners and Breeders Association President
– Gary Tinkle, Michigan Horsemen’s Benevolent and Protective Association Executive Director
– Larry Julian, Former state representative and Michigan Equine Partnership Legislative Liason
– Mike Huckleberry, State Representative  (D-Greenville)
– Tony Cunningham, Great Lakes Quarter Horse Association President
– Cindy Denby, State Representative (R-Fowlerville)
– Mike Sadler, Chief of Staff of Rep. Mike Simpson (D-Jackson)
– Jack Krasula, Pinnacle Race Course Director

Acting Commissioner Lockwood delivered the final speech of the meeting, in which she said her office was ready to work for the benefit of the industry. Lockwood also expressed an openness to communicate and cooperate with the state’s horsemen, which she proved immediately by staying well after the meeting to visit with those in attendance.

“I know you’ve gone through a string of racing commissioners and you always feel like you’re starting again,” L0ckwood told the audience. “I can tell you that’s not the case here.

“I’m very up to speed on what the issues are, the challenges are,” she continued. “We’re going to be working on your behalf.”

Readers interested in finding out how to help support Michigan’s racing industry are encouraged to contact their horsemen’s groups for further information. Behind the jump is a list of organizations that would be happy to assist horsemen and race fans alike in supporting the industry during this critical time. If any groups have been omitted, feel free to mention them in comments.