Michigan horse racing may be about to get a refresh. Asked today if the upcoming DraftKings Horse app will be available in the state, a spokeswoman emphasized that it will debut in 21 states. Also, yesterday, a lawmaker proposed a bill amending laws for county fair horse racing.
Adding DK Horse would mean more horse racing revenue for Michigan. During 2021, the form of wagering brought in $3.1 million in tax revenue, according to the Michigan Gaming Control Board (MGCB).
For perspective, Michigan online casino gambling generated $202 million in taxes and fees in 2021. Online sports bettors provided $7 million last year.
Introducing DraftKings Horse may also mean Michigan’s operators see the results of their tax dollars. In 2021, Michigan online gambling operators provided the Michigan horse racing industry with nearly $5 million in tax revenue, MGCB says.
Michigan Horse Racing and DK Horse
Online sportsbooks are legal in 23 states, with Ohio expected to launch on New Year’s Day. While pari-mutuel wagering is generally a federal issue, DraftKings enters states as they legalize online sports betting. Plus, DraftKings says the new DK Horse app will eventually be folded into its existing offerings.
So it seems certain Michigan horse racing fans will gain the standalone app before May’s Kentucky Derby. That’s the date DraftKings provides for the nationwide launch.
As Michiganders know, DraftKings Casino and DraftKings Sportsbook have been taking bets in Michigan since the online gambling marketplace launched on Jan. 22, 2021. It launched within the first 15 minutes of legal wagering, according to the former Catena Media site Online Poker Report. MichiganSharp is also a Catena brand.
The app on the Bay Mills Resort and Casino license is one of the Big Three operators in Michigan and throughout the US. In October, DraftKings Casino generated $23 million in gross gaming revenue (GGR).
Asked if DK Horse is coming to Michigan, DraftKings Communications Manager Alyson Andrules said to MichiganSharp today:
When DK HORSE launches in the coming months, it’s expected to be available initially in 21 states, pending all necessary licensing and regulatory approvals.
Speaking of horse racing wagers and regulatory approvals, that’s likely why DraftKings Horse will need to be a standalone app when it debuts.
According to DraftKings:
The initial launch of DK HORSE will require customers to sign up and deposit funds separate from that of their one account, one wallet tethered to the DraftKings Sportsbook, Casino, and daily fantasy sports apps. Plans to integrate DK HORSE into the DraftKings product suite will be announced at a later date.
Michigan Horse Racing Is a Different Beast
Online gambling operators are easy to follow, once bettors get used to the brands. In Michigan, the top online casino operators are BetMGM, DraftKings, and FanDuel.
Michigan horse racing is different.
Existing Michigan horse racing betting facilitators include Churchill Downs Incorporated (CDI), TVG, and XpressBet. The state’s lone racetrack, Northville Downs, says it partners with TwinSpires and TVG. MGCB documents show XpressBet also offers horse racing betting through the harness racing venue.
CDI owns TwinSpires, which still offers TwinSpires Racing. That’s despite what happened on Sept. 6, when CDI shut down TwinSpires Sportsbook and Casino in Michigan. The next day, 888 provided sports bettors with SI Sportsbook. However, 888 hasn’t yet added an online casino option back on the Hannahville Indian Community’s license. That may soon happen, though.
That exit doesn’t mean CDI is gone from Michigan.
On Sept. 8, CDI announced:
Beginning in January 2023, FanDuel will pay for CDI technology and services provided by United Tote Company (“United Tote”) to facilitate pari-mutuel wagering on FanDuel’s platforms in the United States, including FanDuel Sportsbook and TVG.
FanDuel Casino and FanDuel Sportsbook partner with MotorCity Casino Hotel in Michigan.
Also, FanDuel’s primary owner, Flutter Entertainment, has four of its five US online gambling brands active in Michigan:
- FanDuel
- Fox Bet
- PokerStars
- TVG
Stardust isn’t present in Michigan.
Michigan Horse Racing Benefits From Tax Revenue
Nearly $5 million in tax revenue from non-tribal Michigan online casino and sportsbook operators benefitted the Agriculture Equine Industry Development Fund (AEIDF), MGCB reported in February 2022.
AEIDF has several purposes, according to the MGCB:
The fund supports the breeding of horses in Michigan, supports research beneficial to the industry, and promotes horse racing and other equine competitions in the state. The AEIDF also supports MGCB’s regulatory expenses, including race personnel, licensing, and blood testing.
MGCB Executive Director Henry Williams says:
Fund revenue was $2.3 million in 2019, $2 million in 2020, and grew to $8.2 million in 2021.
Michigan launched legal online casino, poker, and sports betting in January 2021. MGCB says the fund already saw tax revenue from “internet wagering and simulcast wagering on horse races.”
In 2021, the 3.5% simulcast wagering tax yielded $1.8 million in revenue. During that same year, a 1% tax on CDI, TVG, and XpressBet brought in $1.3 million, the MGCB says.
Meanwhile, most horse racing bettors visiting Northville Downs spend their money wagering on the simulcast races that are taxed at 3.5%, rather than the live ones in front of them that Michigan doesn’t tax. During 2021, gamblers wagered $53 million on simulcast races and $1.9 million on live Michigan horse racing.
Proposed Michigan Horse Racing Bills
Speaking of live Michigan horse racing, HB 6501 adds two paragraphs amending the Horse Racing Law of 1995.
The proposed amendment introduced in the House yesterday reads:
The racing commissioner may grant a race meeting license to a county fair in this state. A county fair granted a race meeting license may conduct live horse races with pari-mutuel wagering under this act. To be granted a race meeting license, a county fair must meet all of the following qualifications:
(a) A county fair applicant for a license to conduct a horse race meeting shall apply to conduct not fewer than 20 days of live horse racing during its proposed race meeting.
(b) A county fair applicant for a license to conduct a horse race meeting shall apply to conduct live horse racing with no fewer than 8 live horse races programmed per racing day and no fewer than 8 horses per race.
… If a county fair holding a race meeting license is unable to program and conduct at least 6 live horse races on a racing date awarded to the licensee because there are fewer than 6 entries in a race, the licensee shall not conduct any pari-mutuel wagering or simulcasting on that day.
The second bill proposed yesterday, HB 6499, would change how the Horse Racing Advisory Commission distributes money from the AEIDF.
State Rep. Julie Alexander, R-Hanover, proposed the bills and didn’t return a request for comment from MichiganSharp today about them.
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