The reason is the same given for passing many policies such as this, falling revenues.
- From a high of nine tracks in the state, only two remain — Northville Downs and Hazel Park Raceway — and staying in business has been a challenge. In 1999, horse racing generated $13.2 million in revenues to the state on wagers of $416 million and boasted of 42,300 jobs across the farms and tracks. By 2015, according to the state’s annual horse racing report, those revenues had shrunk to $3.5 million on wagers of $106 million.
There are a few other tactics that can be used to help, but really, they are all anti-consumer. There's not a lot one can do when the demand for a product in a state has fallen so rapidly.
Short-term the state, if the Bill is signed, should see a revenue increase. Long-term, as customers find other ways to bet (a good deal of Michigan's bigger players will suddenly be cozying up to Grandpa for his out-of-state address), and other things to spend discretionary income on like the new-and-improved Greektown Casino!, revenue will continue to shrink.
For the horse racing industry as a whole, these policies are especially damaging. If states like Texas, Michigan and others continue to enact exclusionary policies, or high priced source market fees, it shrinks the betting base for national horse racing in one fell swoop.
There are no easy answers; such is the way it is in small track, small state live horse racing.