The Brock Talk

Monday, February 1, 2010

Slot Machines Will Be A Win For Texas Racing and Residents


Thumbing through the Sunday edition of the Fort Worth Star-Telegram this weekend, I happened upon a nicely produced, full-color insert promoting bringing slot machines to racetracks in Texas and Native American reservations. The Win For Texas flyer goes on to say that bringing slots to Texas would create 50,000 jobs for the Lone Star State and will create $1 billion a year in direct state tax revenue and create 6.8 billion in economic activity in the state.

While the unemployement rate in Texas is, by some estimates, nearly 2 percentage points below the national average, the 8.3% jobless rate in Texas is the highest this state has seen in some 22 years as reported by the Texas Workforce Commission. No doubt that republicans, democrats and independents can all agree on these figures as troubling. The question the upcoming Texas state Legislature and governor must face is "What are they going to do about it?" Specifically, are they going to ignore 50,000 new jobs? More importanly, though, are they going to set the table for the loss of thousands of other jobs in a failing horse racing industry?

Are they also ready to say goodbye to a large part of the Texas culture and pride that is supposed to be so closely tied to the horse? It should come as no surprise that racing is not the only equine industry experiencing economic challenges in the Lone Star State. They are generally stronger than their racing counterparts currently, but some of those non racing breeds and breed associations in Texas may benefit if future legislation contains similar financial provisions for other equine performance sports in Texas.

In June, Gov. Rick Perry congratulated the state Legislature on passing a state budget that included a projected $9 billion Rainy Day Fund. However that budget included some $12 billion in federal stimulus money that former House Appropriations Committee chief Talmadge Heflin, R-Houston said could come back to bite if lawmakers aren't willing to cut spending next session. "We could have as much as a $15 billion gap to fill," Heflin said on the Sunshine Review website, now with the conservative Texas Public Policy Foundation.

The legislature is not set to meet again at the State Capital in Austin until Janauary of 2011. However, Gov. Perry could call a special session which he has done before. I'm just not sure how likely that is to happen with Perry wrapped in a primary battle for reelection with Sen. Kay Bay Hutchinson.

Passing slot machine legislation in Texas will not solve the upcoming financial challenges of Texas, special session or not. But saying no to $1 billion in additional direct state tax revenue will be hard to justify. Morality also seems to have less influence when tax hikes are mentioned. Politicians are funny that way.

Politicians also like to have a united lobby if they're going to support much. In years past, the legislature should assigned to blame for the failure to enact much progressive pari mutuel legislation in Texas. Historically around Austin, tracks fought among each other, who fought with the Quarter Horse Breeders, who fought with the... (you get the picture.)

However, looking at the last legislative effort to legalize slot machines in Texas, the racing industry produced a united message and appeared to have laid significant groundwork from which to launch the next big effort. With or without a bad economy, there is optimism in most horse racing circles around here with regard to passing slot machine legislation beneficial to the Texas equine industry.

The pro slot machine people also acquired a big free agent in the legislative off season, even if some don't realize it.

Last October, Global Gaming Solutions, a wholly owned enterprise of the Chicasaw Nation, acquired control of both Remington Park in Oklahoma City and Lone Star Park in Grand Prairie, Texas from the bankruptcy of Magna Entertainment Corp. It is obvious GGS would be interested in Remington Park with their existing casino, but why Lone Star Park in floundering Texas?

The Chicasaw Nation, with 13 casinos, and other enterprises including health care, radio stations and several other companies in Oklahoma, is simply hedging their bet. And my sources say their hedging their bet in the direction of Texas getting slot machines at their race tracks sometime in the near future. And when it comes to working with a state legislature with any success, I will venture to say that the Chickasaw Nation will be as effective in the process as Magna was inept.

The challenge for Win For Texas and other supports of slot machines, will be to keep the industry coalition together and be prepared to pounce should a special session be called in 2010. From where I sit, it appears slot proponents are ready.

But confidence can sometimes be a curse in politics.

9 comments:

Donna said...

Are you kidding me? It Texas could get slots I'm afraid what effect it would have on the other states. We would move back home so fast. I miss Texas and my friends. I love racing there just no money. I hope that someday they will have it

Micheal Gill said...

Brock this is a great article I hope everthing goes well in Texas. I would love to bring my horses to Texas to race since Penn National does'nt want me.

Greta said...

What a day at the races Brock. As I told you I had a super ticket 1,5,7,9 with 2,3,4,with 1,4,11,12 with the 2,3,7,9. I won the first race when the 3 was a dq and the 7 was put up then the next race the 4 stumbled coming out of the gate taking the 3 with him but I was lucky because the 2 with no speed left in the race had it all his way. In the third leg it came off the turf and I lost the 4 and 11 but had good mud form with the 12 so I was shocked when the 1 led every step and won by 9. In the last leg I was hoping for the 2 at 9 to 1 or the 3 at 11 to 1 but was still pleased to see the 9 open up and win by daylight. The great thing about the super is my 10 cent ticket cost only 3.60 and I got back more than 40 dollars!

The_Knight_Sky said...

This comes from the Texans which promised in the late 80's that Texas Horse Racing is gonna be huge !?

Well if racetracks and state politicians want to think big, they can start thinking small.

Smaller takeout rates leads to a more robust health for the local horse racing product. And it prepares for when the novelty of slots wears off.

onhertoes said...

Brock,

I really hope slots come to Texas. I love Texas and horse racing, but since I've been attending LSP over the last few years, it seems that the horses that show up for the GIIIs are worse and worse. If Texas doesn't allow the tracks to have slots soon, I'm afraid that LSP won't even have graded races anymore. Not to mention the fact that Texas loses so much money from people crossing the border into OK and LA. I mean don't people get it? If someone wants to gamble they're going to, legally or illegally. Texas (politicians and the general public) needs to get it's head out of the sand and realize there could be a great deal more revenue coming into our state!

suebroux said...

One of the problems hampering expanded gaming in Texas is that there are two gaming PACs that have different agendas: Texans for Economic Development/horsemen want 'racinos', and the Texas Gaming Association is pushing to legalize the resort 'casinos'. The Gaming Assoc. bill during the last session called for increased taxation on slot revenue from racetracks, or something to that effect. The horsemen/racetracks were definitely not supportive. Nothing ever came of it.

At least with Global Gaming Solutions purchasing LSP, the 'Win For Texas' campaign should benefit from more financial support.

Regardless, it's irritating that so much of Texas' money is being spent in Oklahoma and Louisiana.

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bill white said...

well if the people in austin dont want slots at the track they must want them in LA. OKLA. ARK.NM.because all the people in texas are going there to play the slots and run there horses there you cant run them in texas you can for peanuts. maybe the people in austin need to be voted out