State faces backlash after panel cancels 6th racetrack
Racino applicants say Racing Commission didn’t hear their input
Companies seeking state approval to build a new horse-racing track criticized the New Mexico Racing Commission on Friday for not seeking their input before declining to grant a new license this week, pointing out the governor had asked the commission to consider their input more than six months ago.
The commission responded, however, that it had not seen the letter from Gov. Michelle Lujan Grisham because she had issued it to prior commissioners before appointing new members in April.
Racing Commission Chairwoman Beverly Bourguet said at a meeting Thursday the body decided not to approve a sixth state license for a horse track and casino, dealing a blow to companies that had applied. The decision was a reversal from a December 2018 decision by previous commissioners to move forward with issuing a license for a new so-called racino.
In a January letter, Lujan Grisham had asked the racing commissioners at the time to postpone a decision until they conducted “additional and comprehensive research” into the matter of issuing a new license “with due regard for all applicants’ input.” Such study, the letter said, would help determine the validity of allegations made by one of the applicants, Hidalgo Downs, which had claimed a study conducted on the feasibility of a new racino was flawed.
Raymond Sanchez, an attorney and lobbyist for a company that proposed a racino in the Clovis area, said he asked Bourguet after her announcement Thursday why his company had not been consulted before the decision.
“I was surprised that the chairwoman had never seen that letter and knew nothing about it,” said Sanchez, who represents Full House Resorts, a Las Vegas, Nev., company. “Her response was that she didn’t know what I was talking about.”
Warren Frost, an investor and spokesman for Coronado Partners, which proposed a track and casino in Tucumcari, also said his company was not contacted to give input.
“The governor was saying, ‘We want you to do additional research and talk to all the parties before you move forward,’ and they didn’t do that,” Frost said.
Yet commission spokesman Ismael Trejo said the new commissioners, who
have had their positions for little more than three months, haven’t had the chance to review many previous documents.
“We have thousands of emails that this commission has not laid eyes on,” Trejo said.
When asked why Bourguet had not seen the letter, a spokesman for the governor said, “I cannot answer a question on behalf of the chairwoman, but I would imagine, if she had not seen it, that would be because it was not sent to her; it was sent to her predecessor.”
Trejo said the commission was leaving the door open to consider a sixth license in the future but decided it needed to carry out more analysis of the state’s racing industry before doing so. It wants to study issues including the state’s horse population and the overlap of race meets, he said.
“The commission needs an opportunity to digest the ins and outs of those those factors before thinking of issuing a sixth license,” Trejo said. “We didn’t want to keep giving communities false hope when the commission is not prepared to go through the process of issuing a license at this time.”
Applicants said they had made large investments after the prior commissioners, who had been appointed by former Gov. Susana Martinez, voted to move forward with the sixth license. They also said the commission’s decision was a missed opportunity to create additional jobs and generate more tax revenue in the state.
“All of us relied on that,” Sanchez said, referring to the commission’s December decision. “The communities that are affected spent an awful lot of money.”
Skip Sayre, chief of sales and marketing for Laguna Development Corp., which has a joint venture seeking to build a racino in the Clovis area, echoed those sentiments.
“Our reaction overall was one of disappointment,” Sayre said. “We put two years of financial and human resources towards the project with the belief that it would be beneficial to the Clovis and Curry County community.”
Frost accused the commissioners of being influenced by the existing five racetracks in the state, which opposed a sixth license.
“None of the five racetracks want a sixth license, so they’ve done a very good job of lobbying and influencing the commission,” Frost said.
In a letter to the Racing Commission in November, the state’s five tracks — in Sunland Park, Ruidoso Downs, Albuquerque, Farmington and Hobbs — outlined their objections to a new track and the slot machine casino that would go with it.
When asked Friday about the allegations made by applicants, Trejo said the commission’s “focus is on the best interest of horse racing. That’s the only influence their influences are governed by.”
The New Mexican requested comment from all five existing racinos Friday. Four did not respond and the other, Sunland Park Racetrack and Casino, declined to comment.
Under an agreement with
New Mexico’s American Indian casino-operating tribes, the state can license one more track and casino. Three groups have made proposals to build a track and casino in the Clovis area. There also are proposals for racinos in Tucumcari and Lordsburg.
A feasibility study conducted for the Racing Commission found a new track and casino could generate more than $68 million a year in gambling revenues but also could cannibalize more than $2 million in business from existing tracks.
Hidalgo Downs, a company that wants to build a track and slot machine casino in Lordsburg, had filed a petition arguing the Racing Commission should be prohibited from issuing the new license until it has a second study conducted on the feasibility of a new racino.
Hidalgo Downs said a feasibility study done for the commission last fall was flawed. The study found a Lordsburg racino would produce far less slot machine revenue and state taxes than racinos proposed for Clovis or Tucumcari.
David Ring, an attorney for Hidalgo Downs, said Friday that the commission’s decision this week was “neither unexpected nor unreasonable.”
“We agree that the new commission deserves a fresh start and respect its decision,” Ring wrote in an email. “Hidalgo Downs and the Lordsburg community have faith that the new Commission will eventually address this important issue in its own time after a fair and unbiased feasibility study is conducted.”
Tripp Stelnicki, a spokesman for the Governor’s Office, said Friday the governor “wants only solid and fair regulation and promotion of the industry.”
“There were significant concerns about the work the prior commission had done in this area and the muddling of the process,” Stelnicki said. “It is the domain of the new commission to decide whether or not to award a license at this time.”