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Under Bill, Track Could Add Games May 18, 2003

NORTHVILLE -- An ongoing debate over allowing additional gambling games at the state's racetracks is back in the Legislature, and city officials say they're looking at ways to beat the odds of the games coming to Northville.

A four-bill package in the state House would allow Michigan's seven racetracks -- including Northville Downs -- to offer video-lottery terminals, keno and other betting games. The bill is similar to a 1995 video-lottery proposal for racetracks the state Legislature turned down when simulcast racing was approved.

In Northville, where the racetrack is downtown, city officials are considering putting together a ballot referendum to let residents vote on the issue. They're also looking at ways to secure additional funding from the state to cover the costs for police and other services if a bill allowing the additional gambling games becomes law.

"We have no problems with the Northville Downs being a racetrack," said Northville Mayor Chris Johnson. "But we see a fundamental difference between it being a racetrack and being a casino."

Johnson said he's concerned that if it gets the new games the racetrack would "end up dwarfing" the city's downtown. "The racetrack is the downtown's largest bar, largest restaurant, largest entertainment complex, and I see very little of it spilling into the other establishments," he said.

Johnson said it's too soon to decide what action the city will take next -- it depends on what's presented in the final bill. But the ballot referendum is a possibility, he said. "The city of Detroit had probably five or six elections" before voters approved casinos, he said, "and we want the same consideration."

The bills call for the video-lottery terminals to be owned by the individual racetracks but regulated and operated by the Michigan Lottery Bureau. The cities would receive a percentage of net revenue from the terminals.

Lou Carlo, director of operations for Northville Downs, said the video terminals would benefit everybody involved -- including the city.

"I'm not going to tell you the racetrack wouldn't benefit," he said. "But it would also create revenue for the state to solve education and other problems, and it would bring more people into the community. We think there will be a big interaction between the downtown and the track itself."

Carlo, who also operates a racetrack in Lebanon, Ohio, said he's seen additional gambling options benefit other states such as West Virginia, Maryland and Iowa. Legislation similar to Michigan's is pending in Ohio.

"In those states, everyone has moved forward with investment, higher purses (prizes) and tax revenue," he said. "That's why there's so much focus on it, because it works."

In some states, including Delaware, video-lottery terminals have made the racetracks more competitive, said Kenn Christopher, special projects director for the state office of the racing commissioner.

"They're now so strong, and they bring in so much more purse money," he said. "The racetracks are now drawing horses from around the country."

Carlo compares the potential revenue from the video terminals with the 1995 legislation that allowed simulcast racing in Michigan racetracks. The original bill included legislation for video-lottery terminals, but that portion was turned down.

Before 1995, simulcast racing -- betting allowed on televised racing from other parts of the country -- was prohibited in Michigan. Bob Geake, racing commissioner for Michigan, said the year Michigan got simulcast racing, wagering rose 50 percent.

"Before that, people were leaving the state and going to Windsor," he said. Although the Detroit casinos are opposed to bringing video terminals to the racetracks, Christopher said advertising dollars will determine whether some people would go to the racetracks instead of the casinos to gamble.

Christopher said, however, he's seen a study that shows non-horse players are much more likely to take part in lottery betting than horse players.

"A VLT (video-lottery terminal) player is more likely to go to a horse race and try their luck there, and the question is luck," he said. "Horse racing is different because it's for somebody who can do the math, know the odds. A lottery or slot machine (gambler) is not concerned about the odds."

He said a serious horse player probably would use video-lottery terminals, but not to the extent that a nonhorse player would. Mayor Johnson predicted the video-lottery terminals would not generate much revenue for the city or state.

"People who are touting it as new revenue are probably looking through rose-colored glasses," he said. "It will just end up taking money away from the city of Detroit. It's still the same gambling dollar."

Carlo calls the opposition from the city "much ado about nothing." Besides, he said, there are already lottery terminals -- for scratch-off tickets and other Michigan Lottery games -- across Northville, and he doesn't see anybody creating a referendum for them.

"The final analysis is whether the person chooses to play," he said. "These machines are just an automatic scratch-off ticket. That's exactly what they are, and that's what makes them a lottery."

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