State Aid Not A Good Bet For Great Lakes Downs

June 21, 2002
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In his recent swan song to a daily paper, the immediate past general manager of Great Lakes Downs in Muskegon said thoroughbred racing in Michigan is in serious trouble and needs help from the next governor.

Whoa, Nelly. This isn’t a legislative or public policy issue.

As far as the trouble itself is concerned, he seems to have a point. The Downs is the state’s only thoroughbred course, and — because of paltry purses due to low betting levels — it sometimes can’t induce more than four horses to enter the starting gate.

But the solution he suggested sounds like a really serious case of what the military calls “mission creep”: plunging further into what could be a morass — and wanting government to make the plunge. He would have Lansing permit the Downs to become a miniature casino, complete with video slot machines, Internet betting, card rooms and telephone account betting.

It’s easy to see why he might have liked such an arrangement, which also is backed by the Michigan Horsemen’s Benevolent and Protection Association. Such gambling opportunities certainly would be a draw for those West Michigan residents who normally play the slots and blackjack in Vegas or places like Soaring Eagle Casino. The association seems to want to buttress its own gambling revenues with, well, more gambling.

Both the former manager and the association may have been thinking of Canada, where the Downs’ owner, Magna Entertainment, recently announced plans to spend $50 million to buy its 11th race track. That facility — Flamboro Downs (about 45 miles from Toronto) — subsidizes its race purses with revenue from a bank of 45 slot machines.

So, the same thing would work in Muskegon, right?

Well, two points merit consideration.

First, like Flamboro, most of the other tracks Magna Entertainment owns are located in enormous markets — San Francisco, Pittsburgh, Miami, Santa Anita, Cleveland — far out of Muskegon’s or even West Michigan’s league.

Second, if Magna can afford to spend nearly $50 million for Flamboro Downs while also committing itself this year to nearly $90 million for a 12th track near Dallas, then it might make sense to invest more than the $12 million it spent on the cheap two years ago to pick up Muskegon’s failed semi-public harness track.

Frankly, despite some improvements, the Downs still doesn’t look like the polished kind of class act that would draw visitors from the convention crowds that will start arriving in Grand Rapids in two years.

The Downs’ greatest physical exposure to the general public, unhappily, is its stabling along I-96. It gives motorists a charming view of trailers packed with steaming loads of manure and straw — a powerful presentation, but the type that draws flies rather than the betting public.

One thing is encouraging: Magna Entertainment is a big outfit that does things in a big way. The firm’s founder, Frank Stronach, was a penniless Austrian refugee when he and a friend started a tool and die operation in 1957. Today he’s reported to be Canada’s richest billionaire and Magna Entertainment is merely a spin-off of Magna International, his gigantic car parts company. Magna Entertainment this month also is rolling out a 24/7 closed-circuit horse racing and betting network, part of its strategy toeventually dominate the world wagering market.

Well, all power to Herr Stronach and his colleagues. But if they want something to happen at Great Lakes Downs, we’d recommend not depending upon Lansing.

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