Racing agency readies its end

Commission expects to shut down unless state OKs funding

AUSTIN — The state agency that oversees Texas horse and dog racing tracks has abruptly begun preparing to shut down, raising the stakes of a political fight that could cripple a multimillion dollar industry.

Texas Racing Commission officials have stopped signing off on new races and started warning that the agency will shutter by the end of the month unless the Legislative Budget Board approves a funding request.

“Absent the necessary approvals from the LBB, the agency will no longer be able to pay its employees or its rent and will close by the end of the day on August 31, 2015,” commission executive director Chuck Trout told a lawyer representing the tracks in a letter last Friday, adding that, “if the agency closes, all racing will also stop.”

Commission officials believe the board controlled by lawmakers will ultimately approve the money if they repeal a controversial new racing game, but the warning nevertheless has plunged Harris County’s Sam Houston Race Park and others around the state into unexpected uncertainty. State law requires commission staff to attend each race, so closure could leave the tracks unable to operate.

The tumult marks a dramatic escalation in a year-long battle between the commission and some lawmakers over the new game, known as “historical racing.”

“Absent the necessary approvals ... the agency will no longer be able to pay its employees or its rent and will close by ... August 31, 2015.” Executive director Chuck Trout

Also known as “instant racing,” the game allows players to bet on previously-run races that have been stripped of identifications. It is seen by the tracks as a necessary innovation to help them to keep up with states where more betting is allowed, but it has drawn opposition from critics who say the terminals resemble slot machines and would expand gambling here while hurting charitable bingo groups.

The commission approved historical racing last summer over the objection of Senate Republicans, who sent a letter saying the agency did not have the authority to make such an authorization unilaterally.

The approval has become the subject of an ongoing lawsuit, filed by the bingo groups.

The lawmakers, meanwhile, set about during this year’s legislative session to get retribution against what some called a “rogue agency.”

Senate budget writer Jane Nelson, R-Flower Mound, led the charge, proposing to eliminate the commission and transfer its authorization to another agency.

After a debate that featured a heated back-andforth in the state House at 3 a.m. April 1, lawmakers eventually kept the agency but put part of its budget under the control of the Legislative Budget Board.

The move was seen by some as a way to force the agency to reverse course on historical racing by withholding the money until the commissioners repealed their authorization of the game. Seeing no choice, the commissioners have moved to do just that; a vote is scheduled for Aug. 25.

In the meantime, commission officials say they have tried to contact the board multiple times and received no response or indication about what they need to do to get funding.

As a result, commission spokesman Robert Elrod said, the agency has decided not to approve simulcast racing — a game that allows players to bet on races taking place in other venues — after Aug. 31, when the fiscal year ends.

Even though the Legislature only put about 10 percent of the budget under control of the budget board, a full shutdown is an option because that portion contains the agency’s central administration, Elrod said.

“We can’t move forward until we get that approval,” he said, although he added that he expects the commission will get to stay open in the end.

The racing tracks are more worried.

Andrea Young, president of the Sam Houston Race Park in northwest Harris County, lamented the possibility of a shutdown, saying it would help out-of-state gambling interests. She blamed the trouble on Nelson, a powerful member of the Legislative Budget Board.

“Despite no legislative direction or enactment, Senator Nelson is attempting to use the LBB as a personal political tool to bully the Racing Commission to get what she wants — the end of horse racing in Texas,” Young said in a statement.

Nelson’s office did not respond to a request for comment Sunday. A Legislative Budget Board spokeswoman could not be reached for comment.

The Sam Houston Race Park alone was host to more than $135 million worth of betting last year, according to the commission’s most recent annual report. There are two other major horse and dog racing tracks in Texas — Lone Star Park near Fort Worth and Retama Park outside San Antonio.

Overall, the tracks contribute about 36,000 jobs and $5 billion to the Texas economy, according to the industry.

“If the racing commission shuts down this month tens of thousands of people will lose their jobs, generations of horsemen will be put out of business, and Texas will lose millions in tax dollars,” Young said.