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HORSE RACING INDUSTRY PRESENTS UNITED FRONT IN SUPPORT OF VLTS AT MICHIGAN'S TRACKS

15 October 2003

Before a packed crowd, on Wednesday, October 8, 2003, the Michigan Senate Gaming and Casino Oversight Committee heard testimony from Michigan's horse racing industry concerning House Bill 4610, which would authorize video lottery terminals ("VLTs") at Michigan's horse racing tracks. Two overflow rooms with television monitors were needed to accommodate the crowd that gathered to watch the hearing. Speaker of the House Rick Johnson supports the proposed legislation to allow each of Michigan's seven horse racing tracks up to 500 gaming machines and, as many as 2,000, with approval from the Michigan Lottery Commissioner.

In years past the various segments of the racing industry have held different views on a variety of topics and, as a result, it has been difficult for the industry to speak with a united voice on any efforts to make the industry prosper. Racing Commissioner Robert Geake, in a very short amount of time, has been successful in breaking down the barriers of communication with the industry, which has allowed the industry to unite in this controversial cause. Individuals who testified in support of the Bill either directly or indirectly included:

-Representatives/Testifiers for Michigan Farm Bureau: President Wayne Wood; Aaron Bennett, Michigan farmer; and Dr. Henry Vaupel, veterinarian

-Nina and Allie Dufalo, two young riders

-Vice President of Magna Entertainment Don Amos

-Mt. Pleasant Meadows Race Track President Walter Bay

-Michigan Harness Horsemen's Association President Paula Maynard

-William Black on behalf of the Teamsters Union for employees at Hazel Park Raceway and Northville Downs

-Patti Dickson of Michigan Thoroughbred Owners and Breeders Association

-Jerry Chapman for Michigan Standardbred Breeders Association

-United Horse Alliance President Jerry Campbell (Mr. Campbell is also Chair of Republic Bank)

-Gary Tinkle of the Horsemen's Benevolent and Protective Association (thoroughbred horsemen's group)

-Vice President of Hazel Park Racetrack Dan Adkins on behalf of the Michigan Racing Association

-Executive Director of the Great Lakes Quarter Horse Association Craig Close

-Edward Klobich a spokesman for the City of Hazel Park

-Robert Miller a small breeder who is being run out of business.

In addition, Racing Commissioner Robert Geake, Deputy Racing Commissioner Jim Bowes and the Special Projects Administrator (and noted horse racing historian) Kenn Christopher provided the Committee with a historical perspective and a detailed discussion of the importance of racing to Michigan agriculture.

Opposing testimony included a remark from Atwater Entertainment Group's Vivian Carpenter, who stated racetrack VLTs would expand Michigan gaming significantly. She reminded the Committee that a recent poll indicated that 66 percent of Michigan voters do not favor this type of expansion and urged the Committee to vote no to avoid "trampling on Detroit."

Walter Bay, president of Mt. Pleasant Meadows, said, without an industry turn around, his track could be closing in the coming years. "The trend for casinos has been up; the trend for tracks has been down," opined Mr. Bay. "There's no question that unless we get some substantial change in the industry through alternative gaming, we're looking down the road to closing the facility."

Dan Amos of Magna Entertainment Corporation, which owns Michigan's only exclusively thoroughbred track, Great Lakes Downs in Muskegon, testified that Magna is discussing plans for a major racing facility in Romulus. While the facility is not contingent on the passage of this Bill, Mr. Amos supported its passage and predicted it would have a huge positive economic impact on the state if passed. Although many horsemen, breeders and track owners expressed a need to leave Michigan if the tracks are not allowed to offer the alternative gaming devices, Mr. Amos stated that Magna will move forward with its plans no matter what is decided on the VLT issue.

Kenn Christopher, Office of Racing Commissioner, presented a detailed history of revenue issues, noting the decline in revenues and attendance as a result of each new form of gaming competition. Track attendance in 1971, the last year pari-mutuel bets were the only legal gambling in the state, was 3.9 million and has dropped to 2 million in the past several years. In his summation to the Committee, Mr. Christopher said, "If we don't learn from history, Michigan's horse racing industry is going to become history."

The Senate Gaming and Casino Oversight Committee has been conducting a series of hearings on the topic of gaming in Michigan, which are going to continue in the coming weeks. With Michigan facing a huge budget deficit, Governor Granholm has suggested that she is at least interested in looking at the possibility of VLTs. With the Detroit casinos being taxed at a rate that was set assuming that they would enjoy an oligopoly in the region, the prospect of such widespread competition is sure to continue to meet with opposition from an odd coalition of those already in the industry, and those who are opposed to all gaming.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com