Online Horse Race Betting in Michigan Just Weeks Away

If you’re a racebook operator, Michigan is now open for business.

While the state gave a legislative green light to off-track wagering last December, it was conditional upon the production of terms and conditions governing providers of online betting to Michigan’s horseplayers.

Those terms and conditions were published in an Executive Director Order issued by the Michigan Gaming Control Board on May 5.

Interested parties may now apply for a license to operate an account wagering system and online betting may begin as soon as an operator is licensed. By inviting operators to pitch for off-track racebook licenses, Michigan has entered the home stretch in the race to online betting.

How Will Online Betting Work?

Online betting will involve races that are either taking place or simulcast at Northville Downs, Michigan’s only horse track, but wagers will be struck with the licensed third-party operators, under a contract between them and the track. Wagering will be pari-mutuel only and must be funded with an advance deposit by the bettor. At present, race bets on live or simulcast races may only be placed on-site at Northville Downs.

“The order should enable the state’s horse racing industry to gain new followers through ADW [Advance Deposit Wagering] and maintain protection for citizens who wish to place wagers on live and simulcast pari-mutuel racing in Michigan using their mobile phones,” said Richard S. Kalm, the board’s executive director. “Before ADW can go live in Michigan, the race meeting licensee and the certified horsemen’s organizations also must agree to a contract with a provider.”

The track may contract with as many third-party providers as it wishes and it is seen as a sign of the industry’s eagerness for a swift transition to online gambling that the board has set the license fee for those providers at just $1,000, with a $500 renewal charge.

Protection For The Bettor

The board’s terms and conditions require license applicants to submit a plan of operation showing how their online wagering system will operate. It also entitles the board to make background checks into an applicant’s integrity, financial status, and compliance history within the racing industry. Unauthorized use of account-holders’ confidential information is prohibited.

Proven And Lockdown Friendly – Two Factors Driving The Charge

With Northville Downs not expected to re-open before May 28 because of lockdown orders issued by Michigan’s Gov. Gretchen Whitmer, online betting opens the door for racing to take place without spectators on-site, which could be invaluable if the lockdown is only gradually relaxed. Michigan is one of the states hit hardest by COVID-19, with more than 4,500 fatalities.

With bricks-and-mortar outlets shuttered by the Coronavirus, the prospect of online betting riding to the rescue of a revenue-starved industry has moved sharply into focus. Michigan’s casino revenues for March 2020 were down 59 percent year-on-year after the current lockdown began on March 16.

Adding to the urgency is the success of the online race model elsewhere. Churchill Downs’ online wagering outlet, TwinSpires, has been a rare commercial success story in these difficult times, with its first-quarter handle this year rising by 8.3 percent year-on-year, with revenues up by $3.7 million. Active player numbers increased by 11.6 percent in the same period.

TwinSpires saw revenues of $66.6 million in the first quarter of 2020, compared to just $1.9 million taken by the company’s principal racetrack in Kentucky.

What About Online Sports Betting & Gambling In Michigan?

Sports betting (in casinos) and online casino gaming were also legalized in the Great Lakes State last December, but while some land-based sportsbooks opened in March, regulatory frameworks for online sports betting and gaming are still being negotiated with potential operators.

While the board has no plans to accelerate the arrival of online gambling as a result of casino closures, industry analysts believe that the projected deadline for online casinos and sportsbooks to go ‘live’ in Michigan could be brought forward from early 2021 to fall of this year, if the operators’ regulations were deemed ’emergency rules’ under state law, and so allowed to bypass certain procedural requirements.

That decision would lie with Gov. Whitmer, whose office has said that the situation does not satisfy the requirements for ’emergency’ status. Such rules normally require that preservation of the public health, safety, or welfare is at stake.

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