Analysis: Hegar Could Change the Odds with Horse Racing Vote

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Texas Comptroller Glenn Hegar could cast the deciding vote on a new form of gambling in the state on Thursday, but he isn’t saying whether he’ll break the monthslong deadlock at the Texas Racing Commission.

In many ways, this is not his fight. In 2014, before he took office, the racing commission approved rules that would allow “historical racing” at Texas racetracks. It’s a way of betting on races that have already taken place, with identifying information stripped away. Opponents have likened it to a form of illegal slot machines.

Track and horse owners hope the new games would generate enough money to keep their faltering industry alive. They have tried and failed to legalize casinos and slot machines as ways to bring in more revenue; historical racing is their latest effort, and they got approval for it from their regulators instead of asking lawmakers. A state district judge quickly ruled that the new games need legislative approval, but the rule is still in place and the industry is fighting the court’s ruling.

If the rule is repealed, there will be no basis for their appeals.

Some of their opponents are state legislators, and they conditioned the racing commission’s current budget on repeal of the rule: If the commissioners will get rid of the language that allows historical racing, the agency — and the tracks it regulates — will remain open. If not, the agency’s funding dries up and everything shuts down.

The current deadline is the end of this month, and the next meeting of the commission — perhaps the final meeting before that deadline — is on Thursday.

The deadline has been delayed several times, with the Legislative Budget Board giving the agency more time to make a decision. The industry — track and horse owners and affiliated businesses — have been on pins and needles as the deadlines loomed and then were extended.

They hope to leave the rules in place long enough to get a court ruling on whether the games are legal in Texas. State lawmakers would like for the commission to dump the rule, and with it, the lawsuit and the possibility of new gambling in Texas.

Which brings this back to the comptroller. Hegar is an ex-officio member of the commission and usually doesn’t vote. Even when a comptroller does vote, it’s usually a representative and not the officeholder who does it. Though it has come up several times, neither he nor his representatives have voted on whether to keep the historical racing rules in place.

The commission’s last vote was a 4-4 tie on whether to keep the rule. Hegar could break the deadlock, but it would put him in the middle of a fight he didn’t start, and in a peculiar situation. The comptroller is the named defendant in the horse industry’s lawsuit against the state. If the rule goes, the lawsuit collapses, and the state and its comptroller are off the hook.

Asked on Tuesday, he would not say whether he will vote this week, much less how he would vote if he did.

“The pending lawsuit pertains to the constitutionality of a budget rider; the vote at the Commission meeting on Thursday pertains to historical racing,” Hegar said in a prepared statement. “As I’ve said before, this lawsuit is a misplaced attempt to force my office into making a payment against the will of the Legislature. I am interested in a long-term solution to this issue; however, wasting taxpayer dollars by taking advantage of the overburdened court system is not the answer.”

David Cabrales, an attorney for the Texas Horsemen’s Partnership, says Hegar is in a tough situation, with duties to the state treasury and to the racing commission that could conflict with each other. His clients hope the comptroller will stay out; if the other commissioners maintain their previous positions, that would leave the rule in place but also jeopardize the commission’s future.

“We’re optimistic that he will continue to sit on the sideline,” Cabrales said of the comptroller. “He has been very fair about this ... the folks that I represent hope he will maintain his position [of abstention] and stay out of the voting fray.”