Reaping what we’ve sown | Michigan Farm News

Reaping what we’ve sown

Category: People, Politics

by Paul W. Jackson

Horse Track_MFN_2018
“It’s not just about racing. It’s about the economic drivers, the agricultural aspects.”

We’ve sown bad seed, and it’s time for harvest.

Few people in agriculture want to reap it, but it appears, after recent announcements that the state’s last two horse tracks will soon be gone, that race horses in Michigan have been locked in the barn without feed or water and abandoned.

If that were literally true, there would be animal rights protests, condemnation and demands for punishment. But reality is that people who supported and voted to plant Proposition 1 in 2004 as a constitutional amendment have reaped a crop of well-fertilized casinos and, at the same time, plowed the state’s horse racing industry deep into the ground.

“Is it the end? It pretty much looks like it in my book,” said Rick McCune, president of the Michigan Thoroughbred Owners & Breeders Association after the announcement that Hazel Park, the last Thoroughbred track in Michigan, shut its doors; and that Northville Downs, the state’s last Standardbred track, will close in two years. “We’ve been hanging on for 15 years, trying to get something done legislatively, but when your competition is the state of Michigan (lottery) and Native American casinos, it’s hard to survive,” McCune said. “We have a lot of hard-working people who had the plug pulled on them, and I think they feel the same way I do: that we’ve been betrayed by the state of Michigan.”

To be fair, people who voted to pass Proposal 1 were victims of deceptive ballot language. Michigan Farm Bureau opposed the 2004 ballot initiative, which among other things, called for voter approval (referendum) of any form of gambling “authorized by law after Jan. 1, 2004.”

That in itself gave voters who opposed the growing number of casinos reason to vote for it, but there was a little caveat in the last line of the ballot language. The proposal did not apply to “Indian tribal gaming or gambling in up to three casinos located in the city of Detroit.”

Casinos, since then, have grown deep roots. By Michigan Farm News calculations, 13 Native American casinos have begun operations since the proposal was passed.

But as casinos grew, the state’s traditional gambling mainstay, horse racing, fared about as well as the field-edge corn that missed every fertilizer application.

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“Several years before Proposal 1, horse racing and the state lottery were the only gaming options in town,” said Ernie Birchmeier, livestock and dairy specialist with Michigan Farm Bureau. “But when the Mount Pleasant casino started and expanded, there began an attrition of gamblers from race tracks to casinos. Then we had the Detroit casinos and Proposal 1, and lawmakers in Michigan never were willing to make the necessary changes to allow horse racing to survive.”

In other states, legislators allowed race tracks to offer advanced deposit wagering (ADW), which meant gamblers could place horse race wagers on their computers or cell phones. But in Michigan, even with a provision that allowed gambling electronically while at the track, horse racing venues couldn’t get the nutrients they needed.

“This is how silly it is,” said Tom Barrett, president of the Michigan Harness Horsemen’s Association, whose members race at Northville Downs, at least through 2020. “Hazel Park had an app that you could download and bet on races within the confines of the park. If you walked out and placed a bet, technically it was breaking the law,” he said. “All we wanted, both for Thoroughbreds and Standardbreds, was to remove the enclosure rule. That’s what House Bill 4611 does, and the entire horse racing industry hangs on that bill. It is clearly pari-mutuel betting, just with a different medium to make the same bet. But we can’t seem to get the Senate to even bring it up for a vote.”

Chicken Little?

Such reality is like hail on ripening fruit, especially when both remaining Michigan racing tracks announced their closure within two weeks of each other. The state was warned about this exact possibility, said Rep. Dan Lauwers, who introduced House Bill 4611 last year.

“The state never needed more evidence that we were not behaving like Chicken Little when we said we need to change the betting laws or lose the industry,” he said. “But people get numb to it after awhile. They think we’re exaggerating just to get something passed.”
Now, however, with the racing industry on its way to a pitiable harvest of political indifference, along with losses of hay and straw sales, truck and trailer sales, veterinarians and plenty of jobs, it’s time to at least get equipment onto the field, Lauwers said.

“I think the concern in the Senate has been that if the racetracks could bet on their phones, people could do it at casinos as well,” he said. “It’s one of those ‘if I can’t have it, you can’t either’ situations. But the point is that casinos aren’t going out of business because of this. Casino numbers haven’t gone from eight to zero. That’s why I encourage everyone in the equine business to call their senators and tell them that if they don’t pass the bill soon, we will lose a significant portion of our equine industry.”

Part of the reason the bill has reaped nothing in the Senate for 14 months, at least in the minds of people involved in the racing industry, are the same reasons Proposal 1 passed: Money and lots of it.

That opinion appears logical, since, according to the Michigan Senate Fiscal Agency, spending to pass Proposal 1 totaled nearly $20 million, by all accounts coming primarily from casino interests. Less than $8 million was spent to defeat it.

Also, don’t forget that in the 1990s, according to the same Senate Fiscal Agency, “former Governor Engler negotiated 20-year compacts with 11 tribes, which agreed to pay 8.0 percent of their electronic video gaming and slot machine profits to the Michigan Strategic Fund and 2.0 percent to their local units of government. Under some of the compacts, the 8.0 percent payments to the Strategic Fund were contingent upon the tribes’ maintaining the exclusive right to conduct gambling in Michigan.”

When Governor Granholm eliminated the office of racing commissioner and transferred regulatory oversight of horse racing to the state gaming commission, horse racing lost its only advocate within the executive branch.

“I hate to say the gaming commission did not have integral knowledge, but that’s probably part of the case,” said Dr. Hank Vaupel, a veterinarian and District 47 state representative.

“By nature, the commission is regulatory, which is the way it is supposed to be,” he said, “but raising horses to race is such a difficult business that it’s hard to regulate every aspect of it and allow horsemen enough leeway to race. The commission knows all about casinos, but doesn’t have much racing experience.”

Neither does the current state legislature, which lacks the political will to change anything for horse racing’s benefit, said Dr. Don Ryker, an equine veterinarian and chair of the state’s equine advisory committee.

It doesn’t help, Ryker said, that horse racing “has always been the most expensive form of gambling you can have because of the labor and the number of people required to put on a show. For that alone, something should have been done to make it survive,” he said.

Solutions?

Lost ancillary activities that surround the racing industry is why Vaupel is about to introduce two bills in the House that will build an equine fund to promote the industry.

“One involves a fee on Coggins testing that the horsemen would pay, and the other is a small fee on horse feed,” he said.

Such funds would support 4-H and other youth projects, among others, but it may be too late for racing.

“I feel it is tragic that we’re losing the racing industry,” said Vaupel, who raised and raced Standardbreds along with his professional veterinary work at tracks. “It’s doubly tragic because of all the offshoots of the industry. It’s not just about racing. It’s about the economic drivers, the agricultural aspects. It involves the property taxes paid by a farm, the shipping and hauling, the equipment, the people, the jobs involved. It’s a tough business, very labor intensive, and racing opportunities are limited. If they’re nonexistent, that makes it really tough.”

While Vaupel’s bills seem amenable to rebuilding funds for horsemen, it will take considerable time to rebuild the industry, especially if it’s lost.

Many horse owners, breeders and trainers have already left Michigan and taken their jobs, pickup and trailer purchases and employees with them. The economic impact of the equine industry can be seen in the infographic on page 4.

But for all those facts, there is another that brings it all back to reality.

“People want things easy and fast,” Birchmeier said. “Part of the problem is that gamblers have to wait 20 minutes between races to gamble, and maybe even study the horses and jockeys. It’s a lot easier to sit at a machine and push a button.”

Despite that, all is not yet lost, Barrett said.

“We have a little over two-and-a-half years to figure out a new plan,” he said. “Right now our entire industry hangs on House Bill 4611, but we’re not quite ready to give up with Standardbreds. The horse groups have been going to Lansing for years. We’ve been telling them that we’re on our death bed, so maybe with the Northville announcement, we’ll go back and ask if they’ll help us now.

“Without Lansing’s help in getting the gaming aspects fixed, it doesn’t make any sense to build a new track, which is what Northville owners told me they want to do,” he said. “But it’s not a smart investment with the current revenue breakdown and without advanced deposit wagering. Nobody’s going to make that investment under current conditions, knowing that seven tracks have already failed, at least in part because people can’t gamble the way they want on horse races.”

If harness racers hold out some hope, Thoroughbreds may be the first ones to harvest their hay, genetics and jobs and get out.

“As much as I hate to say it, it might be the pragmatic thing to let it go,” Ryker said. “My clients, as many as can, are taking their horses somewhere else.”

McCune, who said if he were younger, he’d leave Michigan too, laments a once-proud racing industry.

“It’s not a cheap way to make a living,” he said. “We’ve lost a lot of breeders because it’s hard to sell a baby when you’re only racing 30 or 40 days a year. I’ve raced in Pennsylvania the last three or four years, and the purses there that might be $26,000, $27,000, have been $9,000 to $10,000 here.”

While there are many more factors that led to racing’s demise in Michigan, it’s clear that the seed sown with Proposal 1 is now yielding a very sad crop.

“I remember going to races in Saginaw with my grandfather,” Birchmeier said. “The place was packed. But in essence, Michigan made a choice. Lawmakers chose by their indifference and misunderstanding, and voters made their choice about which type of businesses they wanted to survive. If racing had been given the chance to survive like other states, it would have. But now, it’s just sad.

“We all know what happens when you sow bad seed,” he said. “You get exactly what we have now. It’s potentially the end of something that didn’t have to end.

“It’s a wise biblical statement that you reap what you sow,” he said. “In this case, because of the seed we’ve sown, I’d say the harvest has yielded nothing but failure. Let’s hope we can find a way to develop a solution and save this disastrous crop.”