Texas Racing Commission Nixes Historical Racing

_{Editor's note: This story has been updated throughout.}

The Texas Racing Commission voted 5-4 on Thursday to repeal rules allowing a new form of gambling, ending a monthslong deadlock that pitted members of the industry against state lawmakers.

The nine-member commission voted in 2014 to allow "historical racing" at racetracks, which involves betting on electronic simulations of old horse races with identifying information removed. The commission has been in conflict with the Legislature ever since.

“We’re trying to find solutions, here,” said the commission’s chairman, Rolando Pablos, shortly before the vote. “We have the power to press the reset button, get together and find solutions that are not this controversial. Certainly, I think we need to move forward. By repealing the rules, we are helping the industry in the short term.”

Victoria North, who attended the meeting as a representative for Comptroller Glenn Hegar, voted in favor of the repeal, breaking the long stalemate over the issue. Hegar is an ex-officio member of the commission but does not usually vote, and he had declined to vote on historical racing in previous hearings. Now that the rule has been struck down, the lawsuit directed against his office for threatening to withhold funds becomes moot.

“It’s time to put this issue behind us and move on,” Hegar said in a statement. “My role on the board of the Racing Commission is to protect the state’s finances, and it’s not in the state’s best fiscal interest to have an agency whose status continues to be uncertain.”

Opponents of historical racing, including Lt. Gov. Dan Patrick and state Senate Finance Committee Chairwoman Jane Nelson, R-Flower Mound, have likened it to illegal slot machines and condemned it as a backdoor expansion of gambling in the state.

After Thursday's vote, Patrick issued a statement backing the commission's decision.

"With this issue now behind us, I look forward to sitting down with responsible members of the horse racing industry to discuss the future of horse racing in Texas," Patrick said.

The Legislative Budget Board had set a Feb. 29 deadline for the commission to repeal the rules allowing historical racing. If they had not done so, the board planned to halt the agency's funding, forcing it to shut down and leading to the closure of the state's racetracks. 

A group of horse owners, called the Texas Horsemen’s Partnership, sued the state in January, contending that lawmakers were relying on an unconstitutional provision in the state budget to use the Racing Commission's funding to force its hand.

“Today’s vote was brought about because of extreme pressure placed on commissioners by a small handful of Senate leaders with threats to shut down the agency if historical racing wasn’t repealed,” said Marsha Roundtree, executive director of the Texas Horsemen's Partnership, in a statement after the vote. “We maintain that the budget rider that forced this vote was unconstitutional and that today’s actions are meant to deny us our day in court. Real Texans will now suffer due to the continuing decline of the horse racing industry in Texas.”

Andrea Young, the president of Sam Houston Race Park, asked commissioners to give the full state Legislature a chance to consider and vote on historical racing by pushing the effective date of the rule to September 2017.

“Obviously it’s not the outcome we wanted, but I think we are ready to move forward as an industry,” Young said after the hearing. “We think that this has been a great opportunity for the industry to cast a really big light on the significant disadvantage that we face. We’re being suffocated by the current regulatory environment.”

Young added that she hopes state legislators will meet with industry representatives early in the 2017 session to generate a "productive dialogue" about how to move forward.

“We’ve heard statewide leadership repeatedly say they want to help the industry and help find solutions,” she said. “The industry’s got a lot of ideas, and we’d be happy to share them."

Mary Ruyle, the executive director of the Texas Thoroughbred Association, testified that she had repeatedly tried to discuss the issue with Patrick but that she had been told that his busy travel schedule could not yet accommodate a meeting.

Several commissioners expressed concern that the Legislative Budget Board would continue pushing for changes without Patrick meeting with representatives of the industry.

“I would think that this is so important to all these people that someone from their office would have seen [the proposal] and would have some comment,” said commissioner Gloria Hicks, who voted against the repeal. “That’s troubling to me as a resident of Texas. I’m disappointed.”

Disclosure: Sam Houston Race Park LLC is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.