New Year Brings many Changes to Michigan's Gaming Industry

25 December 2002

By David Waddell

The regulatory and political landscape for the gaming industry will see some major changes in the year 2003. Michigan has elected a new Governor. The end of 2002 also brought with it a new Executive Director of the Michigan Gaming Control Board (Dan Gustafson) and a new Racing Commissioner (Robert Geake). Each of these key players face unique challenges that could significantly impact different segments of the gaming industry. The year 2003 will be a key year for determining the future success of all of these segments of the industry.

Our new Governor, Jennifer Granholm, is facing a significant budget crisis. There have already been rumblings in Lansing suggesting that she may want to re-negotiate compacts with the tribes to (1) provide a stream of revenue to the state and (2) extend the existing compacts for a longer period of time. Additionally, depending on whether Governor Engler enters into a new compact during his final days of office, she may also be considering entering into a new compact with the Gun Lake Tribe to build a casino on the west side of Michigan.

Dan Gustafson, the new Executive Director of the Gaming Control Board, faces his own challenges in overseeing the beginning of the process of bringing three permanent casinos to Detroit. There will be many companies acting as vendors and suppliers through the construction process who will need to go through the licensing process. Mr. Gustafson also has to grapple with all the regulatory issues that will arise as the Detroit market continues to grow and mature.

On the horse racing front, Robert Geake now steps in as the new Racing Commissioner for the State of Michigan. Mr. Geake has an extraordinary challenge ahead of him in bringing the various factions of the racing industry together to try to sustain the life of the industry given the new competitive challenges. Developing a game plan for the success of the industry will be a difficult task. With competition growing from the expansion of casino gambling throughout the state, and from tracks in Ontario and surrounding states, the industry needs to find some way to preserve its existing clientele and to attract new customers.

As all these new leaders grapple with these issues in the coming year, it will be critically important for there to be some coordination to assure that the state and its citizens benefit from healthy and strong industries in each segment. Only through such a coordinated effort will the entertainment options be maximized and will the maximum number of jobs be preserved. Here is hoping that the new Governor will work closely with the new Executive Director of the Michigan Gaming Control Board and the new Racing Commissioner and with the industry in a coordinated effort.

Have a Happy New Year and a joyous holiday season.