In Arizona, state Senator David Gowan is sponsoring Senate Bill 1794 which would permit racetracks and off-track betting parlors to offer historical horse racing machines.
However, Native American tribes oppose the legislation, and, observers said, that could impact the new gaming compact that Governor Doug Ducey recently negotiated with the tribes. Under the renegotiated compact, new casinos would be permitted and tribes could offer new games that currently are prohibited, like craps and baccarat.
The renegotiated compact also would legalize wagering on sporting events, fantasy sports and keno at tribal and non-tribal venues. Tribes support this aspect of the compact, but according to lobbyist Mike Bielecki, representing the Navajo Nation Gaming Enterprise, that could change if historical horseracing is allowed.
“The tribes would have to completely reevaluate the compact position if, in fact, this law passed and the governor signed it,” Bielecki said.
Racing interests said Gowan’s bill would help modernize and re-energize Arizona’s horseracing industry. Lobbyist Brian Murray, representing Arizona Downs racetrack in Prescott Valley, recently told the Senate Appropriations Committee that handle at Arizona horseracing tracks has dropped 50 percent and attendance has declined 60 percent since voters approved a major expansion of Indian gaming in 2002.
“We feel that the gaming compacts themselves have been largely successful in helping the tribes. But our biggest issue is it’s done serious damage to all of the jobs associated with horseracing. And we’re just hoping that through the modernization program, we can fix that,” Murray said.
Another concern is the so-called “poison pill” in the 2002 gaming compact, which limits the types of games, number of tables and number of casinos tribes can operate. It also mandates tribes must provide 1 percent to 8 percent of gaming revenue to state and local governments. In exchange, gambling outside of reservations is limited to the lottery and parimutuel horseracing, which were grandfathered into the compact.
However, if the state allows new types of gaming on non-tribal land, the tribes are no longer bound by many of the compact’s provisions. State Senator Sean Bowie noted a 2018 opinion by Attorney General Mark Brnovich stated historical horseracing would trigger the poison pill. But Gowan noted no court has ever ruled on the matter.
Save Arizona Horse Racing, a coalition promoting SB 1794, does not believe historical horseracing would violate the gaming compact. Spokeswoman Lorna Romero said historical horseracing is simply an expansion of the pre-existing parimutuel betting system, which was legal prior to the gaming compact. Therefore, she said, it wouldn’t trigger the poison pill.
In a new development, one motive for legalizing historical horseracing may no longer be a consideration. A report commissioned for the Department of Gaming’s Racing Division indicated Arizona Downs is about to go broke, which could put its license in jeopardy. The report said a ELS Gaming has an option to buy an 80 percent stake in the racetrack but only if historical horseracing is legalized in Arizona.
But Arizona Downs officials recently announced an agreement has been reached with Peninsula Pacific Entertainment, owner of the parent company of Colonial Downs Racetrack in Virginia, to finance a 32-day summer racing season–the first live races at the track since it shut down due to Covid-19 last year.
Arizona Downs owner Tom Auther added Peninsula Pacific Entertainment also has an option to purchase a stake in Arizona Downs. He said, “ELS is no longer part of the deal” but he still wants historical horseracing to be permitted in Arizona.
Meanwhile, state Senator T.J. Shope, who sponsored the Senate version of Ducey’s plan, said he doesn’t think Gowan’s bill has enough support to pass. “I don’t know that anyone truly believes it does have the support to go forward with that one. Maybe it’s a bit of a delay to the overall gaming bill that I’m running,” he said.
