GOP State Senate Nominees Speak Out Against Historical Racing

_{Editor's note: This story has been updated with state Sen. Juan "Chuy" Hinojosa’s letter to the Texas Racing Commission.}

Five Republican nominees for seats in the Texas Senate voiced opposition Monday to a proposal that would allow a controversial new form of betting on horse races in Texas.

Paul Bettencourt of Houston, Konni Burton of Colleyville, Bob Hall of Edgewood, Don Huffines of Dallas and Rep. Van Taylor, R-Plano, urged the Texas Racing Commission to reject the commission’s proposed rules allowing historical racing, saying in a joint statement that it “would effectively authorize Las Vegas style gaming in Texas.”

Historical racing is an emergent technology, located at horse racing tracks, in which people bet on electronic simulations of actual historical races, with most identifying information stripped away.

The Senate nominees’ letter criticized the commission for not allowing a full debate in the public and the Legislature on historical racing.

“While thoughtful legislators on all sides of the political spectrum can debate if or how historical racing should be allowed in Texas, attempting to do so behind closed doors without legislative approval violates our state’s system of checks and balances,” the candidates wrote, adding that the proposed rule “clearly breaks existing law.”

The letter comes on the heels of public grumbling from GOP senators about the proposed rules. Last week, Rep. Dan Flynn, R-Canton, requested that Attorney General Greg Abbott rule on the commission’s authority to approve historical racing.

And the current Republican Senate caucus last week backed Flynn, saying the commission should allow the Legislature to steer any debate and changes regarding historical racing.

The historical racing terminals function similarly to slot machines, which are banned in Texas — grist for many opponents who contend that approval would signify a back-door legalization of slots. But proponents, especially strained horse tracks desperate for new revenue streams, argue that historical racing merely constitutes a digitized expansion of permitted pari-mutuel racing.

The commission appeared to side with proponents at its June 10 meeting, pushing the rules forward for a period of public review, which ends Monday. Several commissioners said approving historical racing would be a necessary and legal step to prop up the racing industry, which has struggled against flashier out-of-state competition.

The sole no vote came from Ann O’Connell, a special counsel at the state comptroller's office voting on behalf of Comptroller Susan Combs, who argued that the commission’s authority on the matter was “arguable at best.” Expanding gambling in Texas requires two-thirds approval in the House and Senate, as well as a majority vote from the electorate, as enshrined in the state constitution.

The Senate candidates’ letter served as a reminder of just how difficult that path would be for historical racing, if the new technology were determined to be a gambling expansion. The Legislature has often been hostile to gambling, rejecting every attempt at expansion in the past decade, and opponents of historical racing have argued that the commission’s proposed rules are an attempt to sidestep that political minefield.

Supporters, meanwhile, contend that legislators are influenced by an influx of cash that pours into Austin from out-of-state lobbyists every time the chambers consider an expansion.

At the June meeting, Commission Vice Chairman Ronald F. Ederer said he had led a panel of experts that determined the commission was within its rights to create the new rules.

A handful of other states that have considered historical racing yield an uncertain legal precedent, with some approving the technology and others deeming it distinct from pari-mutuel racing.

In response to the Senate candidates’ letter, a group of industry leaders fired back Monday afternoon with a letter of their own to the commission. Sent by Mary Ruyle, executive director of the Texas Thoroughbred Association, the letter emphasized that the commission has the power to take any “necessary action” relating to the racing it regulates.

“Numerous qualified attorneys with many years of collective experience in the racing industry all agree that the Commission has the legal authority to adopt the proposed historical racing rules,” the leaders wrote.

State Sen. Juan "Chuy" Hinojosa, D-McAllen, echoed those sentiments in a letter submitted to the commission Monday, in which he cited his experience working on the Racing Commission Sunset Bill in 2011 as convincing him that the proposed rule changes are within the commission’s purview. “Without action by the Texas Racing Commission to embrace new technologies and new ideas, the Texas racing industry will continue to decline, hurting not only districts with racetracks, but Texas as a whole,” he wrote.

It is unclear what effect, if any, the recent political pressure will have on the commission, which could formally vote on the new historical racing rules as early as its next meeting in August.

Commission spokesman Robert Elrod said the candidates’ opposition will be considered alongside any other public comments submitted. “At this point, I don’t think anything’s changed,” he said. “We certainly appreciate all the public comments received on the rules ... but for now they’re going to move forward” on making a decision on the proposed rules.