Politics & Government

Texas horse tracks get funding extension as gambling dispute continues

Solar Charge won the Premiere Stakes on last year’s opening day at Lone Star Park.
Solar Charge won the Premiere Stakes on last year’s opening day at Lone Star Park. Star-Telegram

Texas horse tracks won’t have to shut down anytime soon.

Late on Friday, state lawmakers signed off on another 90 days of funding for the Texas Racing Commission, which regulates horse tracks in the state including Lone Star Park in Grand Prairie, shortly after Gov. Greg Abbott appointed new members to the state agency.

“This is a good first step toward getting back on track, so we are giving the agency the time it needs to chart a new course,” said state Sen. Jane Nelson, R-Flower Mound, who heads the Senate Finance Committee.

“Hopefully, with new commissioners we can start seeing this agency adhere to the Constitution, operate within the law and recognize that the Legislature — not the Racing Commission — makes the law in Texas.”

This is the latest development in a continuing feud over historical racing, a controversial new form of gambling that replays past races on slot-machine-like devices, between the Racing Commission and conservative Republican lawmakers who have long opposed an expansion of gambling in this state.

Some racing officials were left frustrated by Friday’s move.

“The Senate got what they wanted,” said Jan Haynes, president of the Texas Thoroughbred Horsemen’s Benevolent and Protective Association that represents licensed owners and trainers in Texas. “They got their appointments.

“By giving us 90 days’ funding, it’s a train wreck,” she said. “You can’t run a business on a 90-day funding plan.”

This more-than-yearlong fight reached such a fever pitch this year that Texas lawmakers missed a key deadline to sign off on funding for the agency.

As a result, the commission closed for a day in early September. During that time, Texas tracks could not allow live betting or live races because there was no state agency to regulate them.

As the funding debate has continued, caught in the middle is a slumping racing industry made up of thousands of Texans who work as veterinarians, jockeys, grooms, breeders and more.

State estimates show they contribute $5.5 billion to the Texas economy and create 36,000 jobs.

New appointments

Texas budget writers have been working behind the scenes to develop a funding plan, knowing that the next deadline for funding was coming up soon.

The commission is funded by the industry it regulates.

Up in the air was whether Abbott would replace racing commissioners whose terms have expired, giving the agency a new voice.

Late Friday, Abbott announced that he has appointed Margaret Martin of Boerne and Rolando Pablos of El Paso to the Texas Racing Commission, replacing two members whose terms had expired.

He also reappointed Gary Aber of Simonton.

All three will serve terms that will expire Feb. 1, 2021.

“This is a disaster,” Haynes said. “Jobs have already been lost and more are going to be lost.”

At issue

At issue is historical, or instant, racing, which 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.

Last year, some lawmakers asked the commission not to approve rules allowing historical racing and then sued and threatened to stop funding or dissolve the agency after commissioners went against their wishes.

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

An Austin judge stopped the historical racing process, agreeing with a lawsuit filed by bingo groups in Travis County, saying decisions on these machines should be made by the Legislature, not the commission.

The commission said it won’t appeal the ruling; a coalition of racetracks has filed a motion to appeal. The first round of briefs is due Dec. 1

Funding disagreements

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.

When the Legislature went back to work in January, some lawmakers upset about the move to allow historical racing threatened to defund the Racing Commission or dissolve it completely.

Nelson, whose district includes part of Tarrant County, has described the commission as “an agency that has gone rogue.”

Ultimately, the Legislature agreed to fund the agency — but stipulated that all central administrative funding such as salaries must be approved by the Legislative Budget Board. In turn, commission officials appeared to be on the verge of repealing the rules that allow the machines.

Then, in late August, the commission decided not to repeal the rules.

Days later, House and Senate budget writers couldn’t reach a funding agreement by Aug. 31, effectively shutting down the commission and preventing tracks from hosting races or allowing simulcast betting.

Lawmakers couldn’t agree on how long to extend the funding. Some wanted it for 90 days; others wanted to give full funding for two years until lawmakers are back in session.

The next day, lawmakers reached a temporary agreement, letting the commission transfer $186,000 of its unappropriated funds to pay for current administrative costs — which let Texas tracks reopen for business — until Nov. 30. Then on Friday, the additional 90 days of funding was granted.

The “decision allows the agency to use its other funding to support the administrative functions needed to keep the agency's doors open,” according to a statement from Nelson’s office.

Anna Tinsley: 817-390-7610, @annatinsley

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