Michigan’s horse racing industry will receive more than $8.1 million in tax revenue from various forms of betting in the state in 2021, according to the Michigan Gaming Control Board (MGCB).
The steep year-over-year increase — up from $2 million in 2020 — comes despite the fact that numerous horse racing tracks in Michigan have closed in the past two decades. Only one track, Northville Downs, has survived the carnage and is currently the only horse racetrack active in the state.
The various forms of betting include, but are not limited to, wagering through the internet, simulcast wagering on horse races, online casino gaming, and online sports betting. However, pari-mutuel wagers on horse racing in Michigan are not permitted by state law.
“Michigan’s horse racing industry has benefited from additional funding to the Michigan Agriculture Equine Industry Development Fund (AEIDF),” said MGCB Executive Director Henry Williams. “Fund revenue was $2.3 million in 2019, $2 million in 2020, and grew to $8.2 million in 2021.”
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The AEIDF is aimed to support the breeding of horses and research beneficial to the industry in Michigan, along with promoting horse racing and other equine competitions in the state. MGCB’s regulatory expenses — such as race personnel, licensing, and blood testing during the live competitions — also receive funding from AEIDF.
Five percent of all taxes on internet sports betting and internet gaming generated by the Detroit casinos are allocated to the fund every year. The funding from each tax source is capped at $3 million per fiscal year. However, payments by tribal operators on the aforementioned forms of gaming are not granted to AEIDF.
Just over one year ago, on January 22, 2021, internet casino gaming and sports betting relaunched in Michigan. Likewise, the state’s horse racing law was amended prior to that, in December 2019, to allow internet wagering on simulcast horse races through a third-party facilitator. Both changes directly contributed to the revival of the industry after things looked rather bleak in previous years.
Eight horse racing tracks were closed since 1998, leaving just one venue open for operations heading into 2019. Among the latest venues to succumb were Mount Pleasant Meadows (2014), Sports Creek Raceway (2015), and Hazel Park Raceway (2018).
Northville Downs was on the brink as well and had to temporarily close during the ongoing COVID-19 pandemic due to public health concerns. No live racing nor simulcasting was offered during closures from the pandemic.
According to official data by the MGCB, the venue hosted 53 live race dates and offered simulcasting throughout 2021. The year before, Michigan collected $954,540 in taxes on simulcasting and $839,124 in taxes on third-party facilitator wagering. The tax rate is 1%.
The industry saw a major uplift in numbers in 2021. Generated tax revenue via simulcast wagering essentially doubled to $1.8 million. On top of that, taxes on internet casino gaming provided $4.5 million while taxes on internet sports wagering provided $412,498 to the AEIDF.
While no new horse racetrack is in sight for the time being, another no-longer-active venue has recently attracted the particular interest of the Little River Band of Ottawa Indians. The tribe has submitted a proposal to build the Lakeshore Casino Resort on the site of the former Great Lakes Downs horse racetrack. Formerly located in the Fruitport Township, it closed in 2007 and was demolished one year later when the tribe took over.
