Sam Houston Race Park ordered to close

Sam Houston Race Park and other horse tracks in Texas are caught in the middle of a legislative battle. Sam Houston Race Park and other horse tracks in Texas are caught in the middle of a legislative battle. Photo: Yasmeen Smalley, Staff Photo: Yasmeen Smalley, Staff Image 1 of / 6 Caption Close Sam Houston Race Park ordered to close 1 / 6 Back to Gallery

AUSTIN — Horse racing tracks around Texas prepared to close at least temporarily Monday night after a dispute between state lawmakers appeared unlikely to end with a deal before a key deadline.

Weeks of speculation and a frantic day of negotiating in private and through the news media did not produce an agreement about whether to allow the operation of the commission that oversees the industry, and by extension, the operation of the tracks themselves.

State senators, who had been pushing to defund the Texas Racing Commission for its approval of a controversial new type of betting, agreed late in the day to let it to stay open for three months. But House leaders held firm to a demand for longer-term funding, leaving a deal in doubt.

By 9 p.m., commission officials, assuming they would not get a critical funding allocation before the midnight deadline, had told the tracks that they could not hold racing events Tuesday.

"The Racing Commission has not yet received the required authorization from the Legislative Budget Board to expend administrative funds beyond Aug. 31, 2015," the commission told the tracks. "At this time, the agency must cease all operations, including the oversight of both live wagering and simulcast wagering."

Because state law requires agency staff to oversee or approve all races, the legislative game of chicken sidelined Sam Houston Race Park in Houston and others around the state.

"I am bewildered that certain members of the Texas Senate appear to have blocked the release of essential funds to the Texas Racing Commission," says Andrea Young, president of the Houston track, adding that, "We believe that this result is irresponsible. We urge the Lieutenant Governor to stand up for 36,000 jobs now before this goes any further."

It was unclear Monday night when or how the dispute would get resolved. Young said the tracks would explore legal options to resolve the situation.

The three main tracks, in Houston, San Antonio and near Dallas-Fort Worth, employ thousands of people and contribute millions to the state's economy.

The tumultuous day continued a year-long drama around the racing commission's approval of "historical racing," a new form of betting in which players bet on unidentified horses through a machine. The game could bring in significant revenue for the state's struggling horse tracks, but it has drawn criticism because its terminals resemble slot machines.

Senate Republicans have said they believe the commission did not have the authority to approve the game because it would expand gambling. A state district judge agreed last year, although that decision is being appealed.

Lawmakers, meanwhile, moved during this year's legislative session to put part of the budget of the "rogue agency" under the control of the Legislative Budget Board.

Senators expected that move would force the commission to repeal its authorization of historical racing, but last week the commission surprisingly voted not to stand down. That led to Monday's fireworks, which occurred on the last day of the fiscal year.

The dispute only concerns about $1.5 million of the commission's $15 million biennial budget, but it is critical to the agency's survival because it is earmarked for the executive staff and rent at their headquarters. Under state law, agencies cannot reallocate money within their budgets without approval from the Legislative Budget Board.

The board is run by Lt. Gov. Dan Patrick and state House Speaker Joe Straus, but Straus recused himself from the process because his family is involved in horse racing, leaving Rep. John Otto, the chamber's budget writer, to represent the House.

Patrick and Senate budget writer Jane Nelson said they would not give the agency the $1.5 million but would agree to allow the commission to shift around its budget to stay open, to avoid sudden layoffs and other unaddressed other problems such as pending records requests.

The time would also allow Gov. Greg Abbott to appoint new leadership to the racing commission, the Senate leaders said.

Abbott declined to comment Monday.

Patrick's office announced his proposed compromise as if it were a final deal, setting off brief celebration from the horse racing industry.

But House leaders said the Senate plan was impossible because part of the agency's budget was already dedicated to other items that could not be abandoned.

In an interview, Otto said a temporary fix was not in the best interests of the state.

"It's just not something I believe we should do," he said.