Politics & Government

Texas Racing commissioners won’t appeal ruling on ‘historical racing’

Here’s a look at some of the historical horse racing machines at the Kentucky Downs.
Here’s a look at some of the historical horse racing machines at the Kentucky Downs. Kentucky Downs

Texas racing commissioners won’t appeal a court ruling that says historical racing gambling devices can’t be used in the state, despite approving a plan last year to allow replaying past races on devices that sound and look much like slot machines.

But the effort to bring the machines to Texas isn’t dead.

A coalition of racetracks has filed a motion to appeal last year’s ruling by an Austin judge, who said such decisions should be left to the Legislature.

“The Texas Racing Commission has no choice but not to appeal,” said Andrea Young, president of the Sam Houston Race Park, which, along with the Lone Star Park in Grand Prairie, is in the coalition. “The Legislature bullied them into inaction.”

Supporters say historical racing is needed to help struggling Texas racetracks compete with out-of-state tracks that offer casinos, bigger crowds and bigger purses. Opponents say the gambling machines would essentially bring a form of casino-style gambling to the state.

Some conservative lawmakers asked the commission not to weigh in on a plan to allow the machines in horse and dog tracks statewide last year. But in August, the commissioners, after a judge in Tarrant County declined to issue a restraining order against the agency, voted to allow historical racing.

Lawsuits were filed, including one that stopped the proposal in its tracks, and as a result some lawmakers have threatened to defund or eliminate the agency.

In the end, the commission simply doesn’t have the money to appeal the court ruling because its legal service is provided by the state attorney general’s office.

“We believe strongly in the appeal but we don’t have the funds to appeal,” said Robert Schmidt, a local orthopedic surgeon who heads the commission. “It’s out of our hands.

“I’m disappointed,” he said. “I believe in the horsemen and I believe they deserve their day in court.”

Out of options

Historical racing, or instant racing, has been controversial in Texas, where lawmakers consistently reject requests to expand gambling.

It involves replaying races on machines with sounds and symbols similar to slot machines. Unlike slots in traditional casinos, the payoff of racing machines is tied to past race results. No information such as horse names, dates and tracks is included that could help players identify the winners in advance.

Last year, the commission received a petition from the horse industry asking for a rule change to allow betting on historical races.

A group of legislators including Sens. Jane Nelson, R-Flower Mound, and Craig Estes, R-Wichita Falls, sent the commission a letter — which reports have shown was partially drafted by lobbyists for out-of-state casinos owned by Tilman Fertitta — asking them not to vote on the issue. And state Rep. Matt Krause, R-Fort Worth, unsuccessfully sought a restraining order to prevent the vote.

Commissioners voted 7-1 approving rule changes to allow historical racing.

Krause sued in Tarrant County, saying commissioners lack the authority to allow the machines. His suit was dismissed.

A second lawsuit was filed in Travis County by a coalition of charitable bingo groups that said the machines might run them out of business. An Austin judge agreed, saying such decisions should be left to the Legislature.

The commission had until last Thursday to decide whether to appeal.

“We are supportive of the tracks’ position,” Schmidt said. “At the present time, we don’t have any options with historical racing going forward.”

The Racing Commission is funded by the industry it regulates. The agency collects millions of dollars a year in fees paid by racetracks and license holders such as owners, trainers and jockeys. The money is turned over to the state, which allocates it back to the commission.

“We don’t have the funds to pursue an appeal,” Schmidt said.

That’s why the racetracks filed a motion to appeal, which could keep the issue tied up in court for years.

“As has been widely reported, the Texas Legislature is influenced by an unholy alliance of out-of-state casino interests, Big Bingo and the Kickapoo tribe so the horsemen and the industry had no choice but to continue in the appeal,” said Young, of the Sam Houston Race Park. “We will not stand idly by while the Legislature and Tilman Fertitta let our horse industry and jobs leave to neighboring states.”

Ricochet effect

When Nelson announced that she had filed the Senate’s version of the budget, she said the $15.4 million earmarked for the Racing Commission was gone, but the bill was just a starting point.

She said during a hearing last month that the bill strips the funding from “an agency that has gone rogue, in my opinion.”

Meanwhile, Estes filed Senate Bill 364 to abolish the commission and transfer its duties to the Texas Commission of Licensing and Regulation, which oversees licensing of trades ranging from auctioneers and cosmetologists to elevator and escalator safety and polygraph examiners.

The bill has been referred to the Senate State Affairs committee. State Sens. Konni Burton, R-Colleyville, and Brian Birdwell, R-Granbury, have signed on as co-authors.

Several lawmakers have said they are concerned that state agencies are usurping the Legislature’s power and overstepping their limits.

“At our hearing, I was hoping for some recognition that a serious mistake was made,” Nelson said Monday. “That didn’t happen.

“I am still not convinced this agency should be funded.”

Anna M. Tinsley, 817-390-7610

Twitter: @annatinsley