Deja Vu: Texas Racing On The Brink

by | 02.08.2016 | 5:33pm

Seventy-nine years ago, Texas Gov. James Allred decided enough was enough. There was an “unparalleled wave and mania for gambling in the state of Texas,” Allred declared in January 1937. Later that year at a special session of the Texas legislature, pari-mutuel wagering was outlawed at Allred's urging. Four tracks – Alamo Downs in San Antonio, Epsom Downs in Houston and Arlington Downs and Fair Park near Dallas – were closed for good after only a few years of operation.

It took 50 years to bring racing back when Texans voted in a statewide referendum in November 1987 to approve pari-mutuel wagering. Three Class 1 racetracks were built: Sam Houston in Houston was the first to open in 1994, followed by Retama Park in San Antonio the following year and Dallas-Ft. Worth area's Lone Star Park in 1997.

It all could end soon. The Texas Racing Commission, which meets in Austin on Tuesday morning, is preparing to shut down all live racing and simulcasting because of the actions of a handful of lawmakers.

These are not principled politicians like Gov. Allred, who said he wanted to end gambling on horse racing because he could “no longer suffer the cries of little children whose parents wasted family funds on gambling.”

The 21st Century politicians who have put Texas racing on the brink are far more pragmatic. They aren't taking a philosophical stance in opposition to gambling as much as they are kowtowing to the wants of their most significant campaign contributors: people like Tilman Fertitta, the Houston billionaire who owns the Golden Nugget Casino near the Texas border in Lake Charles, La., or the Kickapoo tribe that has a native American casino in Eagle Pass, Texas.

One only need look at the amount of money those two entities have contributed to Lt. Gov. Dan Patrick to understand why he is so steadfastly against Texas racetracks having historical racing terminals installed as an additional form of gaming revenue for the tracks and horsemen.

In Texas, the lieutenant governor has the powerful position of Senate president, and Patrick also serves as co-chair of the Legislative Budget Board, which controls the budget for state agencies. The Legislative Budget Board has said it will withhold all funding for the Texas Racing Commission at the end of February unless racing commissioners repeal regulations permitting historical racing. They approved those regulations in August 2014 by a 7-1 vote and have twice since voted not to repeal them, despite lawmakers like Patrick and state Sen. Jane Nelson putting a gun to their heads.

The other co-chair of the Legislative Budget Board is Speaker of the House Joe Straus, who has recused himself on the issue because his family is part owner of Retama Park and would stand to gain if historical racing terminals are installed. Before that can happen, however, the racing commission would first have to win a legal challenge over whether it had the authority to permit historical racing machines, which offer a form of pari-mutuel wagering on previously run races.

Why is a large casino in Louisiana worried about Texas racetracks adding historical racing to their wagering menu?

When I visited Delta Downs racetrack and casino in Vinton, La., in December, I asked a valet parking lot attendant if management had ever done a survey of license plates to see where all the customers come from. “They don't need to,” he said. “I can tell you right now that more than 95 percent of them come from Texas.”

Houston (fourth-largest city in the U.S. with a population of over two million) is 120 miles from Delta Downs, and Fertitta's Golden Nugget is only another 20 miles to the east. Fertitta doesn't want that flow of gambling revenue from Texas to Louisiana to stop. That's why he is so willing to keep writing checks to Texas politicians in order to keep historical racing out of the state's racetracks.

So much has changed since the three Class 1 tracks opened in Texas. The state is literally surrounded by casinos, with gambling happy Louisiana to the east, Oklahoma to the north and New Mexico to the west.

Texas lawmakers have refused to authorize off-track wagering. Adding insult to injury, the attorney general threatened advance-deposit companies with criminal charges if they take bets from Texas residents. Because there are only a handful of racetracks where legal wagers can be made on horse racing in the largest state in the continental United States, many Texans are forced to go online and offshore bookmakers if they want to bet on racing. Of course, if the racing commission is shut down, there will be no legal pari-mutuel wagering in the state.

Another vote to repeal the historical racing regulations will be taken on Tuesday. The racing commission has received nearly a thousand letters in support of historical racing and one letter of opposition, according to materials prepared for the meeting. When the regulations were originally adopted, the commission received more than 13,000 comments during a 30-day public comment period: 9,900 supported historical racing and 3,100 expressed opposition.

It seems pretty clear where most Texans stand. They appreciate the estimated 36,000 jobs the state's horse industry provides – almost as much as politicians like Lt. Gov. Patrick covet campaign contributions from casino companies that do not have the best interests of Texas racing at heart.

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