Texas Racing on a Collision Course

Eric Mitchell / Blood-Horse

The Texas horse racing industry and the Texas Legislature are on a high-speed collision course that could potentially devastate a $5.5 billion industry.

After the Texas Racing Commission failed Dec. 15 to get a majority vote to repeal rules for implementing electronic gaming machines called historical racing, new commission chairman Rolando Pablos directed the commission staff to prepare an agency shutdown plan. The agency employs 50 people.

“This vote will incense the Legislature and we won’t know our plight until February (when temporary funding for the agency expires),” Pablos said. “Will we see another shutdown? Well, we already have, so the responsible thing to do is to operate as if it will.”

Gov. Greg Abbott and Lt. Gov. Dan Patrick both believe the commission exceeded its authority in adopting rules for historical racing and have repeatedly directed commissioners to end the pursuit of alternative gaming. Several commissioners, however, side with horsemen and believe historical racing is the only hope a flagging Texas racing industry has to compete with racinos and standalone casinos in surrounding states.

Pablos said he sees both sides of the argument but stressed that horse racing in Texas is guaranteed to have no future if the racing commission is shut down.

Because of the adoption of historical racing rules, the Legislature refused last summer to provide full funding to operate the commission. Instead, state leaders left it in the hands of a Legislative Budget Board to release the operating funds. Patrick is co-chairman of the LBB. The first budget showdown in September resulted in a one-day shutdown of all live racing and simulcasting Sept. 1, which cost the racetracks about $750,000 in handle. Funding was restored Sept. 2 for only 90 days and extended another 90 days at the end of November.

“Some commissioners are passionate about the industry and some are passionate about the agency,” Pablos said. “I’m very supportive of the horsemen and the racetracks, but we have to have an agency to move forward.

“It is basically a game of chicken, and everyone has dug in their heels—on both sides—and that is very dangerous,” he said.