Politics & Government

First step taken to repeal rules allowing gambling expansion in Texas

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

Bringing slotlike machines to Texas horse racing tracks has gone from being on the fast track to getting bogged down in mud.

A Texas Racing Commission committee took the first step Thursday toward repealing rules that would allow historical racing — the replaying of past races on slot-machine-like devices — at horse and dog tracks statewide.

“It’s no secret that the Senate, and various parties, have actually said our funding would be withheld if we continued with historical racing,” said Ronald F. Ederer, the commission vice chairman, who made the recommendation to move forward with the repeal over the objections of some in the racing industry.

“Why start a fight with them? They hold the purse strings,” he said. Not doing this “would start a war. And it’s a war we can’t win.”

Thursday’s decision comes after a nearly yearlong fight with some conservative lawmakers who asked the commission not to approve the rules — and then sued and threatened to defund or dissolve the agency after commissioners did.

Just last week, lawmakers indicated that the commission would continue to receive funding, but Gov. Greg Abbott has yet to sign off on the proposal. The budget now includes a new provision that requires all central administrative funding for the commission, such as salaries, to be approved by the Legislative Budget Board.

“We have supported this industry as much as we could,” Ederer told those from the industry who oppose the repeal. “We are doing what we have to do.”

The proposed repeal of historical-racing rules could go before the full commission next month. Commissioners could move forward with the repeal, take public comment for a month and vote on the issue in August.

“We had great hope when … the commission approved these rules,” said Marsha Rountree of the Texas Horsemen’s Partnership. “By repealing these rules, you are knocking our legs out from under us.

“We deserve the right … to see it through to the end.”

Ongoing saga

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

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

“The beauty of this is it is a horse product; it’s pari-mutuel,” said Mary Ruyle, executive director of the Texas Thoroughbred Association.

In August, the commission approved historical racing at dog and horse tracks even though some conservative lawmakers had asked commissioners not to weigh in.

Rep. Matt Krause, R-Fort Worth, asked a judge to prevent the commission from voting. After a judge in Tarrant County declined to issue a restraining order, commissioners voted 7-1 for historical racing.

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

Krause filed a lawsuit claiming that commissioners lacked the authority to allow the machines, but the case was dismissed.

A second lawsuit had more success. It 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 lawmakers.

Officials with the commission have said they won’t appeal the ruling. A coalition of racetracks has said it will.

This is really bad for the industry,” said Andrea Young, president of the Sam Houston Race Park. “I believe the industry was very much caught off-guard” by this proposal.

“We know the industry is on the ropes,” she said. “I feel like there’s a lot of fear mongering.”

Ederer noted that the appeal could take two years in the court system — and then the Legislature is back in session.

“We’ve got to look at the end of the day,” he said.

He said the repeal of historical-racing rules was on Thursday’s agenda at the request of Racing Commission Chairman Robert Schmidt, a Fort Worth orthopedic surgeon, who has been talking to lawmakers about historical racing and the commission’s funding.

Lawmakers’ turn

When lawmakers began the legislative session in January, some decided to take action.

Sen. Jane Nelson, R-Flower Mound, filed a state budget that stripped $15.4 million from the commission. Sen. Craig Estes, R-Wichita Falls, filed a proposal to dissolve the commission and transfer its duties.

Nelson said during a hearing that the commission is “an agency that has gone rogue, in my opinion.”

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

Estes’ bill, which would have transferred the commission’s duties to the Texas Department of Licensing and Regulation, never made it to a committee hearing.

The House budget bill included funding for the agency, and when the measure came out of conference committee recently, the funding remained.

Anna M. Tinsley, 817-390-7610

Twitter: @annatinsley

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