On Thursday, November 8, 2012, the Michigan House passed House Bill 5546 (“HB 5546”), a bill that would revise several aspects of the state’s horse racing laws and permit the operation of electronic machines at tracks utilizing historic races, by a vote of 91-16. The bill, introduced this April by Rep. Kevin Daley (R – Lum), seeks to update statutory horse racing requirements and to expand the type of wagering that occurs at tracks to allow wagering on the new form of electronic games.

If passed, the legislation would amend the Horse Racing Law of 1995 to provide a near complete overhaul of the current statute. The legislation would allow the use of “Instant Racing” machines, which look and operate much like slot machines and allow users to wager on historical races. The machines use data from past races and provide the user with a limited amount of information about the horses to assist in determining the wager. The video display can appear much like a slot machine or video lottery terminal, but the determination of winners is claimed to be based on the outcomes of the past races.

The Michigan Constitution (as amended by Proposal 1 of 2004) requires both statewide and local voter approval of any form of gambling authorized by law after January 1, 2004.  Opponents of the Legislation have indicated that the electronic game portions of the proposed legislation are unconstitutional under this provision.

Shoshanna Levine, an attorney representing Hazel Park Raceway, told the Agricultural Committees at a hearing on a concurrent senate measure in April that there is no constitutional issue because “pari-mutuel” wagering is not specifically within the scope of the constitutional provision on gambling activities and that pari-mutuel wagering has been allowed in Michigan since the 1930’s. Recent amendments to the original bill language appear to seek to address this by stating that all electronic wagering allowed under the bill would be “limited to wagering on the results of horse races, but include all technology and innovations related to horse races and wagering on the results of horse races that may exist now or in the future.”

The existing Horse Racing Law, however, authorized wagering on “live” racing rather than historic races.  Thus, the opponents of the bill are likely to contend that wagering on “historic” races is a new form of gambling requiring a statewide and local vote to be constitutional.

In order to become law, the bill must be approved by a majority of the Senate, approved by the by the Governor, and must comply with the requirements of the Michigan Constitution.

 

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