Historical racing machines recently became legal at horse and greyhound racetracks in Texas. However, if a track wants to install the machines, it will have to apply to the state, get approval from the Texas Racing Commission and consider manufacturers’ lead times.
In addition, a group of nonprofits that gets funding from bingo sued the racing commission and is seeking a court order to block the games, which they claim are “thinly disguised slot machines.” The group’s lobbyist Steve Bresnen said, “In the case of charitable bingo, you get slot machines at racetracks and anybody within 50 miles minimum of a racetrack is out of business.” The Kickapoo Traditional Tribe of Texas, which operates the state’s only casino, also has joined the lawsuit.
John Elliott, chief executive officer at Global Gaming Solutions, owner of Lone Star Park in Grand Prairie, said, “As a matter of law, Lone Star Park is not going to move forward on this until it is clear. There are a lot of unknowns. And we hope obviously that the Texas Racing Commission ultimately prevails so that some much-needed help can be provided to the Texas horsemen.” Elliott noted the machines’ proceeds could boost racing purses and attract better competition in order to bring in more bettors and horses and to boost the state’s equestrian industry.
Andrea Young, president and chief operating officer of Sam Houston Race Park in Houston, said she’s moving cautiously regarding historical racing machines but added she’s confident the racing commission will prevail in the lawsuit. However, she noted, “Even if that lawsuit wasn’t out there, I don’t think many tracks would be in a position to make an application starting Monday. There’s a lot of work.”
Officials at Retama Park near San Antonio also said they are weighing their options and will not submit applications immediately.
But Steve Lamb, general manager at Gulf Coast Racing in Corpus Christi, said the greyhound track already has hired an architect to prepare drawings of the machines’ locations for the racing commission. “We’ve either got to go forward or decide not to go at all. There are definite concerns. We realize that we could put them in here and be stopped the next day,” Lamb said.
Even if the lawsuit is dismissed, state legislators could raise issues when the new session begins in January, since 15 members of the Texas Senate Republican Caucus wrote a letter to racing commissioners, asking them to reject historical racing terminals. They stated that authorizing the machines would go “beyond the statutory language and legislative intent” that permits limited forms of gambling. State Rep. Matt Krause, who unsuccessfully sued the racing commission in August, said he is considering possible legislation, although he noted he’s more concerned about commissioners abusing their authority than whether or not the terminals should be allowed.
In other Texas gaming news, the U.S. Fifth Circuit Court of Appeals has affirmed a lower court’s ruling that the state may prohibit companies like Churchill Downs Inc. from taking state residents’ wagers via the internet and telephone. The panel of three judges determined a Texas law banning internet and phone wagering did not violate the constitution’s protections on interstate commerce, but it did acknowledging that case law on potential violations of the commerce clause are “quite simply, a mess.” The court ordered Churchill to pay the costs for the state’s defense.
Two years ago a district court in Texas ruled against Churchill Downs Inc. when it challenged the state law in an effort to keep taking state residents’ bets through twinspires.com, its market-leading account-wagering operation. Churchill Downs had argued that the law banning online and phone wagers treated “bricks-and-mortar” sites differently from online operations.
The appeals court ruling said that Churchill had failed to demonstrate that Texas law amounted to discrimination. “Plaintiffs have the burden of showing discriminatory effects, not merely illustrating that discriminatory effects plausibly exist,” the judges wrote. The company closed twinspires.com to Texas bettors following the ruling.
Online betting is banned in Texas, but limited off-track betting is legal.
Churchill Downs spokeswoman Courtney Norris said the company will “continue the appeals process, but we have not finalized our decision.”
