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Grooming a dead horse
Without some drastic and innovative solutions, will Michigan's horse racing industry ride into the sunset? Industry insiders warned about the impending disaster five years ago, and fear new legislation will deliver the final blow, driving equine to other states and countries.
This time, the last person out of Michigan can turn off the lights from horseback. If there are any horses left.
"That's not an overstatement," said Ernie Birchmeier, livestock specialist with Michigan Farm Bureau. "The horse racing industry is in serious peril of being driven out of the state, as evidenced by the recent closing of the Jackson Harness Raceway and declining racing revenues across the board. Also, we may think there will always be a pleasure horse industry here, but with even more nonsensical, misguided and emotion-driven legislation proposed in Congress, there may be no way to save Michigan's equine industry, or its contribution to the state's economy."
Lawmakers can't say they weren't warned. Five years ago, before Proposal 1 was passed by Michigan voters, the agriculture industry predicted dire unintended consequences of amending the state constitution to restrict additional gambling without a popular vote, a ballot proposal heavily financed by the casino industry. The ballot initiative exempted casinos from the requirement to have voter approval before gaming expansion.
"Passage of Proposal 1 won't stop ... casinos from entering people's backyards," Michigan Farm Bureau President Wayne H. Wood warned in 2004. "But it will make it much more difficult if not nearly impossible for horse racetracks to evolve ..."
Inability to evolve led to the Jackson track closure in early December, preceded by Muskegon's thoroughbred track failure the year before. That facility was purchased by the Little River Band of Ottawa Indians in 2008, and it will "pursue the establishment of a tribal casino in Muskegon," according to Magna Entertainment Corp., which sold to the tribe for $1 million under its $9 million asking price. Add in rumors that the Sports Creek Raceway near Swartz Creek is in serious trouble, and horsemen such as Aaron Bennett of Newaygo County say there's no sense grooming a dead horse anymore.
"In the past, we foaled 15 mares of our own every year," he said. "They were all Michigan stallions and mares. This year I have six mares to foal, and only four are from Michigan sires. This will be the last crop of Michigan foals we raise. We'll continue to breed horses, but they'll all go to Ontario, New York or some other state. That animal will not generate one more dollar for Michigan's economy. It won't be trained here, groomed here or raced here, and no tax money will be generated here. Our Michigan sales used to be about $9,000 a year, and it's fallen to under $3,000 in the last three years."
Those figures might not sound like much, but when multiplied by the state's 35,000 equine operations, according to the 2007 Michigan Equine Survey, it's an economic impact that can't be ignored, even if a third of the 155,000 animals are used only for pleasure and recreation, as the survey indicated.
"The legislature had the opportunity to fix this problem when House Bill 4610 was introduced in 2004," Birchmeier said. "But they blew it."
Known as the Agricultural Enhancement bill, the legislation would have allowed Michigan's racetracks to add video lottery terminals, and thus compete, if only in a small way, with casinos. Proponents said the bills would have added $300 million in new revenue for Michigan. Both the House and Senate passed such a package, but it stalled in conference committee, and ultimately died.
The inability to generate additional, taxable income gave casino interests a decided advantage, and that uneven playing field led directly to Jackson Harness Raceway's demise, said Brett Boyd, a horseman and president of the Michigan Harness Horsemen's Association.
"Mountaineer Gaming (owner of the license to race and simulcast at Jackson) decided to cut its losses because it couldn't expand gaming," Boyd said. "It decided to cut its losses. It has been successful in other states where they are allowed to expand gaming." Mountaineer employee Dan Rakietan, who resigned after the closure, declined to comment on the decision at this time.
The real shame about the Jackson closing, Boyd said, was that attendance was increasing at the track.
"It's unfortunate," he said, "because last year, we saw some of the largest attendance in the last 40 years. Jackson had great marketing, great connections with families and children with dollar hot dogs and popcorn and pop and other promotions. It was a low-priced family entertainment option, particularly on Saturday nights. But the problems were insurmountable. With three metro Detroit casinos and several Indian casinos spending millions of dollars to be sure the so-called racino idea didn't progress, Mountaineer finally waved the white flag. Every time an effort has been made to do something similar to what makes other states successful, it's been railroaded by the casino interests."
If it seems odd that the horse racing industry, famous for attracting gamblers, would be so opposed to the newer gambling interests, it's not when you consider how much easier it is to pull a slot machine handle or gamble at home with no threat of repercussions aside from lost money, Birchmeier said.
"Internet gambling is illegal, but not enforced," he said. "And on cable or satellite TV, people can watch any number of horse racing channels, and gamble through an account set up in another state. Until we level that playing field, everyone involved in the industry is losing money on a daily basis."
Boyd said it's his job to keep fighting, but he hasn't seen much encouraging news lately.
"We won't give up, because we have so many fans and so many farms that have significant investments, and the farms can't just pick up their sticks and leave," he said. "But it is difficult to make a living anymore. What's frustrating is that the majority of the racetrack money is returned to fans, and we've even offered to return some of the racino money back to the state to put to good use. But the casinos, which have a much greater profit margin, don't pay a great deal of tax money. Our business model for parimutual wagering has so many opportunities to create more revenue, but Proposal 1 handcuffed the industry from moving forward."
While refusing to concede that Michigan's racing industry is on its way to extinction, Racing Commissioner Christine White said it probably will end up being much smaller in years to come.
"Horse racing is suffering the same trials and tribulations the rest of the economy faces," she said. "It's declining in Michigan and nationally, but in other jurisdictions, alternative gaming has helped increase purses. But in Michigan, with people hit hard because of the auto industry's troubles, people don't have the discretionary income to spend on something like gaming."
The lion's share of discretionary income spent on horses generally goes to the pleasure horse industry, but bad legislation is putting even that in peril, said Val Vail-Shirey, executive director of the Michigan Equine Partnership (MEP).
"We're having issues with trails closing to horseback riders, the total ban on horse slaughter in the United States, and now, U.S. Rep. Conyers of Michigan will likely reintroduce a bill that would prosecute people who transport horses to slaughter houses in Canada or Mexico. So here you have the bottom dropping out of the racing industry, the higher cost of feed and unwanted horses, and people are just walking away. It's hard to stay upbeat about the industry when the Humane Society of the United States is making the decision that horse slaughter is immoral. Without the slaughter option, people are just leaving them to starve."
As was the case in 2004, warnings about unintended consequences of legislation are prevalent. The American Veterinary Medical Association (AVMA) warned in its agenda for the 111th Congress that "if Congress decides that horses and other equids are prohibited from being processed for human consumption, it is estimated that each year an additional 100,000 unwanted U.S. horses would need to find an alternative method of care..." The AVMA also said "legislation is needed to ensure the humane care and treatment of these animals."
In other words, Birchmeier said, banning horse slaughter will lead to horse starvation, a much more cruel and agonizing death than slaughter.
"The Hollywood celebrity money behind the bans may be a great way for some people to salve their consciences and get some publicity out of their flavor of the month, but it is agriculture and taxpayers that will have to deal with the unintended consequences," he said. "What many of these people don't seem to understand - and maybe they can't because they have no idea what responsible animal ownership is all about - is that there are fates worse than death, and death is a part of life."
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