On Tuesday, February 11, the House Regulatory Reform Committee held a hearing on SB 661, a bill that would authorize historical horse racing (“HHR”).  SB 661 was previously passed by the Senate in December 2019.

HHR is an electronic gambling machine that permits players to bet on replays of historic horse races, and displays the results of the wager in an entertaining manner. Players are able to either review handicapping information and predict the order of finish, or allow the machine to automatically make selections. The wagering is based on the pari-mutuel system where the bets are pooled into different betting pools for different events, ranging from picking the winner of the race, picking the top three finishers in the exact order, or any number of similar bets traditionally associated with horse racing wagering. Proponents of HHR argue that it will result in stability and sustainability of horse racing, whereas opponents claim that the HHR machines are really just slot machines that have not been authorized under state law. HHR has been approved in several states across the country, but has also been banned in several other states as violating constitutional prohibitions against new forms of gambling.

In its hearing, the Committee received testimony in support of the bill from the current owners of the Schwartz Creek racetrack and the owners of Northville Downs. They noted that breeders have been forced to move out of state due to the decline of the horse racing industry in Michigan, and that HHR is necessary for horse racing to survive in Michigan. Representatives from Firekeepers Casino, MGM Grand, and MotorCity Casino testified in opposition to the bill. They cautioned that if HHR moves forward, the Detroit casinos will have a significant drop in slot revenue and that HHR could lead to some tribal casinos suspending revenue sharing payments to the state by arguing that their exclusivity guarantee in their compacts is violated by HHR. Committee members and witnesses discussed whether HHR was a new form of gambling that would require a statewide referendum as well as a local vote under the Michigan Constitution or if it could move forward without a vote.

The Regulatory Reform Committee adjourned without voting on SB 661, and the bill will need to be taken up again by the Committee to advance to the House Ways and Means Committee before coming before the floor for a vote.


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