Robert Schmidt unexpectedly resigned as chairman of the Texas Racing Commission on December 7. He will remain as a commissioner and will be replaced as chairman by Rolando Pablos, who was appointed to the commission by Governor Greg Abbott last month. Pablos served as chairman of the racing commission from 2008 to 2011.
Abbott wanted Schmidt to have commissioners vote to repeal a previously approved rule allowing historical racing at the state’s racetracks. Schmidt said he could not comply because he supports historical racing as a way to help the state’s struggling racing industry. The machines have not been installed at any state racetrack. “They felt strongly about a direction, and I felt differently. I think it’s an honest difference of opinion. I respect the governor’s right to implement the policies he desires,” said Schmidt, who has served as commission chairman since 2011.
Schmidt said he was prepared to put the issue on the February agenda, to give the new commissioners time to become familiar with the issue and to allow horsemen who have filed a lawsuit over the issue to have their case heard in court next month. “That was at odds with what the governor wanted,” Schmidt said.
When commissioners meet on Tuesday, December 15, they could vote to repeal historical racing rules or to republish the rules to allow more time to consider the matter. “I don’t think it is dead,” Schmidt said.
The commission also could vote to do nothing, which would allow the rules to remain on place as the case works its way through the legal system. Charitable bingo and tribal interests disputed the adoption of historical racing rules and a judge determined the commission did not have the jurisdiction to pass historical racing, ruling it was a matter for the legislature. As a result, the commission’s funding was challenged and currently it operates under temporary financing through February 29, 2016. Withholding operating funds from the TRC led to a one-day shutdown of all racing and simulcasting throughout the state on September 1.
State Lieutenant Governor Dan Patrick recently sent a letter to former Chairman Schmidt, requesting that “you take this opportunity to unwind historical racing and return the commission to its statutory purpose of enforcing the Texas Racing Act and its rules to ensure the safety, integrity and fairness of Texas parimutuel racing. As I have previously stated, I believe the decision to publish rules for the implementation of historical racing was not an appropriate action for the commission. The move runs afoul of the Texas constitution and the express desire of many members of the Texas legislature, including me. Additionally, I am committed to gathering stakeholders together – horse breeders, trainers and other associated and affiliated agri-business – to find ways to improve opportunities outside of expanding the gambling footprint in Texas.”
The TRC is funded by the industry it regulates, collecting millions of dollars annually in fees paid by racetracks and license holders, including owners, trainers and jockeys. That money is turned over to the state, which allocates it back to the commission. The racing industry has generated an estimated $5.5 billion for the Texas economy.
Patrick not only wrote a letter—he received one as well, from the Texas Thoroughbred Association, representing 1,100 Thoroughbred racehorse owners and breeders in the state. TTA Executive Director Mary Ruyle wrote, “I want to express deep disappointment with your stance as evidenced in your letter of addressed to Texas Racing Commission Chairman Dr. Robert Schmidt, encouraging him to hold yet another vote on the historic horse racing rules at their next meeting, and repeal the rules that were adopted after a lengthy, transparent and inclusive process. As acknowledged in your November 4, 2015 letter to industry representatives, the matter of historical racing remains pending before the Third Court of Appeals. Due process under the law is one of the cornerstones of our democracy. It appears that you may wish to disregard the right of Texans to due process through the court system.” Ruyle also noted historical racing rules were adopted properly by the TRC.
Opponents of historical racing said offering the games is expanded gambling which only can be allowed by two-thirds of the state legislature. Voters also must approve it. Supporters said the games are an extension of legal parimutuel gambling–a way to help the beleaguered racing industry compete with neighboring states that supplement purses with casino gambling.
