Texas Horse Racing Is Fighting for Survival

Thanks to a last minute injunction stemming from a lawsuit filed by the Texas Greyhound Association, the Texas Racing Commission did not have to make the decision Tuesday that will decide the future of horse racing in Texas. The commission tabled a discussion that would've decided whether or not to keep so-called historical racing terminals on its books, before the commission runs out of operating cash at the end of February. Historical racing terminals, which allow track patrons to place bets on races that have already happened, are considered vital to the continued existence of horse tracks in Texas. They also look and behave a helluva lot like slot machines, particularly to the Legislature, which doesn't like them.

The machines usually have reels, buttons and lights, just like slots. The also have a typically small video screen that replays the results of an already run horse race that's been scrubbed of all identifying information. Little handicapping information is made available about the race, but the machines allow people at tracks to place bets when live or simulcast races aren't being run — and to place more bets quickly.

The commission approved the terminals in August 2014. Texas lawmakers immediately pushed back against historical racing, claiming that it was an unlawful expansion of gambling. In November 2014, before any of the terminals were installed, a state district court ruled that the commission had outstripped its authority. The machines were, according to a decision that is currently under appeal, an expansion of gambling. The Texas Legislative Budget Board, which controls the racing commission's purse strings, has threatened to strip the TRC of funding should it refuse, as it has thus far, to take the language allowing for historical racing terminals off its books.

"I believe the decision to publish rules for the implementation of historical racing was not an appropriate action for the commission. The move runs afoul of the Texas Constitution and the express desire of many members of the Texas Legislature, including me," Lieutenant Governor Dan Patrick, a member of the budget board, said in December.

Members of the horse racing community say that they want historical racing to have its day in court.

"We hope the commission will ultimately decide that the hard-working families of the Texas horse industry are at least due their day in court," the Texas Horseman's Partnership said after the racing commission deadlocked in December over whether or not to dump historical racing. "In the meantime, we encourage the LBB to put politics aside and fund the agency in accordance with the will of the Legislature so that [there is] no further damage to an industry already in hard times. 36,000 jobs and the entire horse racing industry are on the line." 

Ray Paulick, a longtime horse racing writer who now operates The Paulick Report, a racing industry blog, says the case isn't as cut and dried as Texas lawmakers would have you think. Historical racing is simply an extension of parimutuel betting, Paulick says, because players are playing against each other, not the house. The tracks just take a rake on money that is distributed as it would be were it wagered on any other horse race.

Texas tracks need historical racing, Paulick says, so they'll stop losing gambling revenue to surrounding states that offer greater varieties of betting options.

"People who live anywhere near a border are going to gamble in Louisiana or up at the WinStar Casino in Oklahoma or over on the New Mexico side of the border by El Paso. They're gambling on slot machines and table games. Historical racing terminals aren't the same thing. They're not slot machines, but they offer [a different kind of wagering]. Historical racing saved Oaklawn Park in Arkansas. Oak Lawn Park, where a lot of Texans used to go and a lot of Texans still go, probably would be out of business today were it not for historical racing," Paulick says.

Because of tracks' desperate need for a shot in the arm amid declining interest and revenues, Paulick says members of the Texas racing community that he's talked to are ready to suffer a temporary shut down in order to give tracks their shot in court at preserving historical racing. They hope that the threat to the 36,000 jobs the state says the industries create will stir the Legislature to action, he says.

Last September, tracks across Texas shut down for a single day before a temporary funding deal was worked out between the budget board and the racing commission. The commission's current funding runs out at the end of February. A hearing on the Texas Greyhound Association's case is set for February 18. The commission said Tuesday that it would wait for the results of that hearing before taking any further action. Racing at Grand Prairie's Lone Star Park is set to begin again in April, as long as the racing commission is funded.

If the commission were to toss historical racing, it could be the death knell for Texas horse racing as it currently exists, Paulick says.

"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," he says.