Texas Racing Commission Sets Texas Horse Racing on Path to the Glue Factory

Texas horse racing, if you believe the people most dependent on it, is now doomed to die a slow death. Thursday morning, the Texas Racing Commission, in a 5-4 vote, decided to take a rule allowing historical racing terminals at Texas horse tracks off the books.

Historical racing terminals are machines that look a lot like slot machines and behave a lot like slot machines. They differ from traditional slots in that the outcome of each individual play is not determined by blind chance, but by the outcome of a previously run horse race that's been scrubbed of all identifying information. Historical racing terminals also pay out of the parimutuel pool. Players are playing against each other, with tracks taking a rake, rather than playing against the track.

The Texas horse racing community, and the tracks themselves, have insisted that historical racing terminals are essential to the sport's survival in Texas since 2014, when the racing commission initially issued regulations allowing the terminals. Other tracks, like Oaklawn Park in Arkansas and Kentucky Downs, have seen themselves revitalized following the installation of the machines, which allow for betting beyond live racing and traditional simulcasting. Tracks need the machines, they say, to compete with neighboring states — like Louisiana and Oklahoma — that offer more comprehensive betting.

Many of Texas' Republican leaders view the issue differently. Led by Lieutenant Governor Dan Patrick and state Senator Jane Nelson, members of the Texas GOP have insisted that historical racing is not an extension of parimutuel racing, which is legal in the state, but is an entirely different form of gambling. Any new form of gambling in Texas requires the approval of the state Legislature.

In November of 2014, a state district said that the commission had outstripped its authority in improving historical racing. The TRC appealed the decision, but the fight was on. The Texas Legislative Budget Board, the body responsible for funding the commission, began pushing for the TRC to kill the historical racing rules. Last September, tracks across Texas closed down for a single day before a compromise was reached between the board and the TRC and the can was kicked a couple of times in the coming months until today, basically the drop dead point for funding. The LBB had insisted that it would not fund the TRC past the end of February, if historical racing stayed on the books.

Last week, after voting on historical racing was delayed due to a now-withdrawn lawsuit by the Texas Greyhound Association, there was speculation that the racing commission would hold out for a final decision on their appeal and shut tracks down in the process.

"The racing industry looks at it this way: Do they want to die a sudden death, or do they want to die a death by a thousand cuts? With all the competition they face and the handicaps that they've been given, it's death by a thousand cuts," longtime horse racing journalist Ray Paulick told the Observer.

Thursday, the commission seemingly opted for that slow death.

“We’re trying to find solutions here,” TRC Chairman Roland Pablos said. “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.” 

As for what those solutions might be, Marsha Roundtree, the executive director of the Texas Horsemen's Partnership, announced Thursday that her group would be pushing hard for a fix in the Legislature.

“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. 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," she said. "Horse racing has been approved by voters, and historical racing is a legal form of parimutuel wagering covered in the racing act. If Lieutenant Governor Dan Patrick wants to help the Texas horse industry, as he has claimed, he will work to approve legislation in the 2017 session to give Texas tracks a fighting chance against neighboring states. So far, we have only heard words. In 2017, the 36,000 who work in our industry will settle for nothing short of action."