Racetrack VLT Legislation Introduced in Texas

The measure calls for a constitutional amendment on state-operated gaming machines.

A Texas lawmaker has introduced legislation that would authorize a constitutional amendment on video lottery terminals at racetracks and at tribal facilities.

Democratic Sen. Juan Hinojosa introduced the bill Feb. 22. The VLTs would be regulated by the Texas Lottery Commission and the Texas Racing Commission.

Meanwhile, Texas HORSE, an equine lobbying group, has scheduled an event called "Horse Week at the Capitol" in Austin April 1-5 to push for legislative support of Hinojosa's measure.

The bill states its purpose is to "expand the revenue-generating ability of the state lottery by authorizing this state to operate a video lottery system consistent with public policy strictly limiting the expansion of gambling in this state. Except as expressly authorized under other law, the people of this state intend to allow only state-regulated video lottery games to be conducted in this state, and only in locations at which pari-mutuel wagering is conducted at racetracks.

"Limited gaming is intended to enhance live horse and Greyhound racing, horse shows and events, horse and Greyhound breeding programs, entertainment, and employment in tourism and agricultural industries of Texas, and to assist this state's horse and Greyhound racing industry, support programs intended to foster and promote horse and Greyhound breeding, and improve the living and working conditions of personnel who work and reside in and around the stable and backside areas of racetracks."

In a March 5 release, Texas HORSE president Dr. Jacqueline Rich said the legislation could preserve horse racing in the state. Texas offers Thoroughbred, Quarter Horse, and Arabian racing.

"We are currently surrounded by states that have slot machines at the horse racetracks that generate millions in purse money and put Texas racetracks at a severe disadvantage," Rich said.

The release said that in 2012, Louisiana, New Mexico, and Oklahoma paid more than $214 million in purses, while Texas racetracks paid less than $24 million. Texas HORSE contends that the majority of the money bet through gaming devices in surrounding states comes from Texas residents.

Hinojosa's bill calls for a 30% state tax on VLT revenue, with 70% going to the racetracks. Horse tracks would have to pay 11% to an equine development fund for purses and breed development and 1% to a performance horse fund.

Of the Greyhound tracks' share, 12% would be paid to a Greyhound development fund.

There are other requirements such as a $1 million a year payment by each horse track to pay for accident insurance for jockeys and 0.5% for racetrack capital improvements.

Rob Werstler, director of racing for the Texas Quarter Horse Association, said purses, number of races and racehorses, and pari-mutuel wagering have declined 44%-74% the last 10 years because of gaming competition in other states.

"This is Texas horse racing's last stand," Werstler said.

The bill provides protection for live racing dates at Class 1, 2, and 3 racetracks. For example, Class 1 tracks–Lone Star Park, Retama Park, and Sam Houston Race Park–would have to offer the number of racing days offered in 2002 or a minimum of 50 programs or 500 races per year.