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Analysis: Texas Racing Pines for Political Fix

A pending set of gubernatorial appointments could end the current round of brinksmanship over what kinds of gambling are allowed in Texas, but it won’t solve the long-term problem facing the state's troubled racing industry.

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Sooner or later, the governor is going to replace or reappoint three members of the Texas Racing Commission, and that could end the current round of brinksmanship over what kinds of gambling are allowed in Texas.

But it won’t solve the long-term problem facing the state's troubled racing industry. The odds for horse and dog racing in Texas are lousy, and no solution that suits both the people at the tracks and the people at the state capitol has emerged.

Horse racing was supposed to be huge in Texas after voters approved pari-mutuel racing in 1987, promising big bucks, family fun, economic development and large contributions to the state treasury.

“Don’t raise taxes, race horses,” read one bumper sticker promoting the idea at the time.

But the enterprise has been limping for at least the last decade, with spotty attendance, small purses and all the difficulties of an industry that doesn’t seem to have much hold on the public’s interest.

It isn't that lots of Texans don't like to gamble.

More money is wagered in Texas than you might think. A state auditor’s report from June 2010 noted the total gambled on horses here — the handle — was $412.2 million in 2006, $408.8 million in 2007 and $387.5 million in 2008. That was dwarfed in other states, such as California and New York, where the 2008 handles were above $2.5 billion, but it’s real money. The handles for dog racing in Texas were smaller but still noticeable: $91.9 million in 2006, $84.4 million in 2007 and $59.8 million in 2008.

You’ll notice that those numbers wilted a little more every year. That continued: In 2014, bettors wagered $66.6 million on Texas dog races and $371.7 million on Texas horse races, according to the racing commission.

Gaming promoters perennially complain that the state is just letting its gambling dollars slip away to Las Vegas and smaller attractions closer by, in New Mexico, Oklahoma, Arkansas and Louisiana. Part of their argument is that the purses are better elsewhere because other forms of gaming allowed in those places boost attendance and interest and money. With just racing, Texas’ gaming venues don’t draw the crowds.

Periodic attempts to expand gaming — allowing slot machines at tracks, or full casinos — have died before an unwilling Texas Legislature, even when public polls indicated overall approval for more games.

The latest effort to save the industry in Texas has run afoul of the wishes of top state lawmakers — who have threatened to shut down the entire enterprise.

The state’s racing commission approved rules for historical racing in 2014. The game relies on old races with identifying details — horse names, jockeys, and so on — stripped away. Some versions resemble slot machines, but promoters argue that historical racing is not an expansion of what’s allowed under Texas law. A court disagreed late last year, and the industry appealed.

Although they didn’t file a single bill addressing the issue, lawmakers added a line to the state budget requiring the racing commission to have written permission from the Legislative Budget Board to stay in operation.

That approval, it turns out, is conditioned on the commission erasing historical racing from its rules. If it does, the industry lawsuit disappears and the prospect of a new way to gamble disappears with it. But in August, the racing commission defied lawmakers and voted 4-3-1 to leave the rules alone.

Three members of the commission — Gary Aber of Simonton, Michael Martin of San Antonio, and Vicki Smith Weinberg of Colleyville — have been serving for months past the end of their terms, and the governor has neither reappointed them nor named replacements.

Weinberg missed the August vote, but Aber and Martin both voted to keep the historical racing rules in place. Industry officials had asked commissioners to do that to keep their lawsuit on the issue alive — saying at the same time that lawmakers might shut down the commission and with it, the state’s tracks.

The new deadline is Nov. 30. Some lawmakers want to grant another extension of either 90 or 180 days. And Gov. Greg Abbott can weigh in at any time with his pending appointments.

See where this is headed? The replacements would either keep the rules or not, continuing the standoff and court fight or ending them.

Either way, racing advocates are at wits' end. “There’s nothing else out there,” said Jan Haynes of Dallas, who owned 47 horses “when it was good” and now owns three. She’s a director with the Texas Horsemen’s Partnership.

“With the current Legislature, they’re never going to approve more gaming,” she said. “Everybody’s leaving.”

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