Court Rules Against|Michigan Racetracks

(CN) - In a blow to the horse-racing industry, the 6th Circuit upheld a law requiring voter approval to expand gambling in Michigan, saying the statute is neither discriminatory nor unconstitutional.

The federal appeals court in Cincinnati struck down a bid by members of the state's horse-racing industry to kill the 2004 law, which effectively limits slot machines and table gaming to casinos already operating in Detroit and on tribal lands.

Detroit-area Northville Downs and other horse-racing interests sued the state in 2008, arguing that the voter-approved initiative known as Proposal 1 violated the Commerce Clause, the First Amendment and the Equal Protection Clause of the 14th Amendment.

A federal judge sided with the state, ruling that the plaintiffs' First Amendment claim showed only a "subjective chill" on free speech, and that the race tracks had failed to prove that their decreasing revenues created a burden on interstate commerce.

The three-judge appeals panel agreed, rejecting Northville Downs' claim that Proposal 1 created two classes of gaming licensees and was therefore discriminatory.

Judge Julia Gibbons found that the law "easily passes this test because it is well-established that the regulation of gambling, including limitations on gaming such as those contained in Proposal 1, is a legitimate state interest."

In a concurring opinion, Judge Gilbert Merritt pointed out that, although "Proposal 1 creates on its face a monopoly for three Detroit casinos engaged in casino-type gambling games," the horse-racing industry's discrimination claims are irrelevant, as a state's "ban on gambling may be either total or selective because the Supreme Court has made it clear that the 'greater includes the lesser.'"

An expert for the plaintiffs testified that between 1972, when Michigan first adopted a state lottery, and 2007, wagering at Detroit-area race tracks declined by 85 percent. Gambling at race tracks tanked in the 1980s when Indian gaming began, and it took another steep dive in 1996, when voters agreed to expand legal gambling in Detroit in an effort to revitalize the city's floundering economy.

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