Derby Sparks Interest in Horse Racing

1 May 2002

By David Waddell

Horse racing in Michigan is a year-round affair. As spring arrives, preparation has begun for one of the premier events in the world of sports, the Kentucky Derby. The Derby is traditionally run at Churchill Downs in Louisville, Kentucky on the first Saturday in May. The Derby reminds people in Michigan about the fun of going to the track. Many spectators and bettors also go to Michigan's seven tracks to place wagers on the race and watch a simulcast broadcast of the event. Michigan has seven tracks: Sports Creek Raceway, Northville Downs, Hazel Park Harness Raceway, Jackson Harness Raceway, Great Lakes Downs, Mount Pleasant Meadows and Saginaw Harness Raceway. On Derby day, live racing is occurring at four of these Michigan tracks. Thus, the Derby presents a terrific opportunity for the tracks to draw a big crowd to showcase the excitement of live racing, while at the same time educate new customers on the technology of simulcasting.

Hazel Park Harness Raceway began its Standardbred season by opening its doors for racing on April 1st. Over the 2002 season, Hazel Park will offer 140 racing dates. Jackson Harness Raceway, also a Standardbred racetrack, began its racing season on April 17th and will offer 24 days of racing this year. Great Lakes Downs in Muskegon began Michigan's Thoroughbred racing season on April 29th. The race track will host 118 dates of racing this year. Mount Pleasant Meadows, offering mixed racing, will debut May 4th of this year, the same day as the Kentucky Derby. Saginaw Harness Raceway, another Standardbred venue, is also a part of the racing season in 2002, offering racing and wagering to all interested in both the spring and fall. More information on Michigan's Horse Racing Industry can be obtained at http://www.mda.state.mi.us./racing/index.html

Last November, Michigan's Racing Commissioner, Annette M. Bacola, announced a total of 567 racing dates at Michigan's seven tracks. The competition will include Thoroughbred, Standardbred, Quarter, Arabian, Appaloosa and Paint horse racing. Along with a full schedule of racing dates, all seven of Michigan's pari-mutuel racetracks are open for full-card simulcast wagering throughout the year. Simulcast wagering offers bettors a convenient means of wagering on a variety of horse racing events, in turn, promoting more business at race tracks. Simulcast wagering is responsible for roughly 90 percent of the total wagering handle at Michigan racetracks, making it an integral part of the horse racing industry. Simulcast wagering is also what enables bettors to wager on events throughout the country, including the Kentucky Derby.

Although the Kentucky Derby takes place at Churchill Downs in Louisville, Kentucky, the race benefits horse racing and agriculture industries nationwide. Michigan takes a particular interest in the Derby because it is simulcast at all seven of Michigan's tracks, making betting on the race easy and convenient. The popularity of the Kentucky Derby was evident last year as the seven Michigan race tracks saw bettors wager $1,158,941 on the Derby alone. Even more astounding than the amount wagered on the Derby at Michigan tracks were the pay-outs to winning patrons. Of the $1,158,941 wagered, $976,286 was paid to winners. Also, a fair amount of money wagered at the tracks goes to the state, the host city and into the purse for winning horses.

Wagering at Michigan's tracks is down slightly from the same point last year. Competition from the ever-evolving state lottery and from the commercial and Native American casino industry has had an effect on the horse racing industry. Although competition with casinos and the lottery is growing, Michigan horse racing is still vital to the state. Michigan Horse Racing Commissioner Annette M. Bacola has recently stated, "Michigan's horse racing industry has suffered considerably in recent years because competition for the gaming dollar has reached new heights." Despite these pressures, Michigan horse racing is a $1.2 billion a year industry that employs over 42,000 people and contributes in excess of $31 million annually to state tax revenues.

This competition for the gaming dollar should be a positive development from a consumer standpoint. It should be triggering the horse racing industry to pull together to find ways to make its gaming product more attractive. Yet, in the past decade, as the number of casinos in the state of Michigan has grown from one to twenty, the only major competitive change involved the addition of simulcasting. The industry has consistently fought with itself rather than fighting together to stay competitive. Too often, the horse racing industry has taken a "woe-is-me" approach at the loss of its gaming monopoly, and has failed to do what it can to improve and become more competitive.

As Derby Day approaches, the industry has another window of opportunity to convert once-a-year visitors into regular patrons. What will those customers find? Will there be clean facilities with modern furnishings and seating? Will the food and concessions jump from the 1950's into the 21st century? Will the industry find ways to make new customers feel comfortable (with handicapping training)? Will the industry find ways to make live racing more entertaining between the races? Will the tracks find other ways to make the experience more fun?

Although there is increased competition for the gaming dollar, the horse racing industry should be comforted that interest in the sport remains high. The key for the future of the industry is to find ways to build on what it has and to try as many different ways as possible to sustain consumer interest. The industry could learn a lot by visiting minor league baseball stadiums around the state like Oldsmobile Park in Lansing or Fifth Third Park in Grand Rapids. Both of these facilities consistently attract large crowds while offering a product that a short time ago garnered little consumer interest (single A minor league baseball). "How do they do it?" is the question each racetrack owner, each horsemen's association and the Commissioner's office should be asking every day.