Tough Times for the Texas Racing Commission With the Texas Legislature

Texas track owners were hoping this would be the year that they rallied the ailing Texas racing industry. After more than a decade of decline they were poised to see some improvement in their situation, but the 84th biennial Texas Legislature has proved even less open to the idea of helping out the state horse racing industry than usual.

Sam Houston Race Park President Andrea Young deemed the 2015 thoroughbred meets at Sam Houston an overall success. True, there was the infamous buzzer incident with Roman Chapa and this year saw them once again cutting back on the number of thoroughbred race days at the park, but the horses still pulled in crowds eager to see them run and bet on the outcomes. In today's Texas racing industry, that is a victory.

Despite the larger crowds, Young and other racing insiders were hoping the state legislature would step in and give the struggling industry a legislative hand during this session, but aside from stern scolding to the Texas Racing Commission the Texas racing industry has only a been a blip on the Lege radar this session, despite determined lobbying from Young and others in the industry. "It's been frustrating. Texas traditionally considers itself a very pro-business state, but this approach is a very anti-business stance," she says. "Texas racing has great markets with solid tracks. You'd think we'd have better horses but we're playing on an unlevel playing field and the great ones don't come here."

Last August the Texas Racing Commission voted 7-1 to approve historic racing for the state. Historic racing is a form of gambling where you bet on the outcomes of old horse races -- the things that would tell the gambler which race it actually was have been removed -- in a process that's a lot like playing a slot machine. The move was hailed by the presidents at the state's three Class 1 tracks as a move that would help resuscitate the struggling industry.

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State Rep. Matt Krause, a Fort Worth Republican, filed a lawsuit saying commissioners lacked the authority to allow the machines but the suit was dismissed. But after that a coalition of charitable bingo organizers filed another petition against the move in Travis County. In November Travis County District Court Judge Lora Livingston ruled the TRC had overstepped its bounds by signing off on historic racing. State racing industry insiders were disappointed with the news but the Kickapoo Traditional Tribe of Texas, which operates the state's only legal casino at Eagle Pass and the coalition of charitable bingo organizers that had complained such a move would eat away at their business, were elated.

Things got even more dicey for the TRC as the 84th state legislative session started up. It turned out some legislators were rather displeased that the TRC had tried to allow historic racing without involving the Lege. By December state Sen. Craig Estes, a Wichita Falls Republican, had filed a bill seeking to abolish the TRC entirely. .The text of SB 364 is a pretty bald statement of its purpose "relating to the abolishment of the Texas Racing Commission and the transfer of its powers and duties to the Texas Commission of Licensing and Regulation."

Specifically, Estes wants to dissolve the TRC into the Texas Commission of Licensing and Registration. State Sen. Konni Burton,a Republican from Colleyville, signed on in February as a co-author and state Sen. Brian Birdwell, a Republican from Granbury, signed on in March. The bill hasn't even made it into committee so at this stage in the legislative game it's looking more like a statement than a thing that will actually happen this session. The senators made it very clear via SB 364 that they were not happy with the TRC. That displeasure became even more evident with the start of the session.

Once the session formally started up this year TRC officials tried to smooth things out with the Lege but state senators were still threatening to defund the entire commission after the legislative session started. TRC Chairman Robert Schmidt appeared before the Senate Finance Committee in February where the state senators grilled him for 40 minutes and called the TRC a "rogue" and "renegade" agency.

"Right now your budget is zero, and I've had nothing here today that's convinced me that it needs to change," committee Chairwoman Jane Nelson, a Flower Mound Republican, told Schmidt during the hearing, according to the Texas Tribune.

"If we received the letter today, if we had to do it all over again, I'd be in your office the very next day," Schmidt told Nelson. "Of course we'd change our pattern."

But despite a very impressive mea culpa from Schmidt the senators were apparently not mollified. In fact, according to the Legislative Budget Board from April 21, the Senate's budget for the TRC was still nonexistent, compared more than $3.4 million allotted to the TRC by the House budget. TRC spokesman Robert Elrod says that there's been no change in the senatorial stance on funding the TRC that he's been made aware of. The Senate had previously allocated about $15.4 million per year to the commission, but Nelson stripped the funding from the budget, according to the Fort Worth Star-Telegram.

Meanwhile, Krause, the guy that previously filed the first lawsuit against the TRC's historical racing gambit, urged the the state House to pull the commission's funding. Krause reasoned in a speech that any commission that tries to flout the legislature should be punished, but the House didn't go for it.

But not everyone in the Lege is unfriendly to the racing industry. Right now there are even a couple of bills filed that could actually help the beleaguered industry. House Bill 3667 filed by Rep. Roberto Alonzo, a Dallas Democrat, proposes to do a little "purse enhancement" pitching the idea that some taxes be refunded to the race tracks to help them fatten up their purses and draw better horses, better trainers and jockeys back to Texas racing. The bill hasn't moved past the filed stage yet.

Senate Bill 1027, filed by state Sen Kel Seliger, a Republican from Amarillo, proposes "purse enhancement" through a "purse enhancement refund" to be doled out by the state comptroller. Like every other racing industry bill, this one hasn't made much headway so far, but it's a clear sign that some state lawmakers are at least a little bit aware of what has happened to Texas racing over the past decade. That's not much comfort to the heads of the three Class 1 tracks in the state.

Over at Sam Houston, Young says she was hoping lawmakers would help the horse racing industry by finding ways to increase purse size and improving the breeding program incentives even if the state continued to be firmly against allowing casinos. Young says they are trying to make the best of things and to work with what they have, even if the state has stayed rigidly opposed to gambling and casinos - the things that help race tracks in Louisiana, New Mexico and Oklahoma offer larger purses. "What all of this has done is really put pressure on us and our product," Young says. "We don't own the horses and the jockeys go where the money is, and that has placed an intense pressure on the race tracks."

At Lone Star Race Park, president Scott Wells had high hopes for historical racing, but since the TRC has dropped the matter, Wells says he's focused on the park and offering a good experience to guests who come to bet. Partly, this is just a practical decision, because he can't control the rest. "The politics of horse racing may be out of our hands. We may continue to have racing that is not as good as it was 10 years ago but we've spent millions refurbishing our suites, refurbishing every level of our stadium," he says. "It's a lot more fun when we have great horse races but a horse race is still a horse race and people still enjoy the pageantry of it."

Kevin Whalen, head of Retama Race Park in San Antonio, is also taking the marketing approach. "Our goal is to get more people to the track with theme nights, promotions, concerts, whatever it takes to get people out here to experience this," he says. Whalen says they aren't really looking at the number of days but they're trying to offer thoroughbred races when people will have more time to come out and spend time watching the horses. The main thing is to get people out to Retama, but that really doesn't hinge on race days either way. "You know, our biggest day isn't even with live racing. It's the Kentucky Derby. We pulled in about 6,000 people last year. It's one of our best days of the year."

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