Defying Pressure, Regulators Uphold Historical Racing

In a victory for racetracks and a rebuff to state lawmakers, the Texas Racing Commission on Tuesday declined to outlaw historical racing in the state.

Historical racing refers to gambling on electronic simulations of past races with identifying information removed. The commission approved historical racing a year ago, but no tracks have yet offered it to gamblers. 

Legislators opposed to historical racing threatened earlier this year to kill the commission's budget if it allowed that type of gambling. With its budget under threat, many expected the commission to outlaw historical racing. Although the commission’s $7.7 million annual budget comes from licensing and fees paid by the racetracks, legislators still must appropriate that money. If they don't approve its budget before the commission’s money runs out on Sept. 1, both the commission and the tracks it regulates could be forced to shut down, Commissioner Ronald Ederer said. 

After hearing on Tuesday from racetrack owners who said they were willing to deal with those consequences, the commission, which oversees dog and horse racing in Texas, voted 4-3-1 not to repeal historical racing.

When the commission first approved historical racing a year ago, the move drew criticism from Senate Republicans who said the TRC had overstepped its authority.

“The Senate Republican Caucus urges the Texas Racing Commission to not adopt the proposed rules on historical racing,” Senate Republicans wrote at the time. “Historical racing … is a matter best left to the Texas Legislature to consider.”

In November of last year, a state district court ruled the commission lacked the authority to allow Texas racetracks to install historical racing machines, a decision several Texas racetracks are appealing.

Those owners were happy with Tuesday's commission decision and will continue to fight in court for historical racing rights, said Andrea Young, president of Sam Houston Race Park. 

“We look forward to having our day in court on historical racing, and are confident that the Court of Appeals will uphold the validity of these essential rules,” Young said in a statement. “We continue to have hope that the historic Texas horse and racing industry can thrive in Texas, continuing to employ thousands of hard-working people.”

The Racing Commission, however, has not joined in the court appeals, saying it lacks the resources to do so.

“We believe the rules [on historical racing] are legal,” Racing Commission Chair Robert Schmidt said at Tuesday's meeting. “We just don’t have the avenue to appeal.”

Before Tuesday's vote, Ederer worried aloud that if the commission didn’t ban historical racing, the Legislature might “destroy the industry” by defunding the commission. The industry will suffer if racetracks are forced to shut down next month, he said. Ederer ultimately voted in support of historical racing.

During about an hour of public comment on historical racing, only one speaker voiced opposition. Lawmakers, not the commission, should dictate gambling policy, said Anatole Barnstone, a lawyer representing charitable bingo halls suing the commission to outlaw historical racing.

The commission voted twice on Tuesday against repealing historical racing. After the first vote, commissioners were confused as to whether they had repealed or upheld the games; they voted again to make sure they had it right.