New Mexico officials find themselves in a surprisingly prickly political predicament these days: How to move forward with the issuance of a single coveted racino license for one of several applicants.
At a time of unprecedented legal expansion of various forms of gaming, the state’s horse racetracks have run up against the hard-line policy of its tribal gaming compacts: Only six racinos are allowed statewide. Five licenses have already been issued, and five applicants are vying for the final license. Three applicants are focused on the Clovis area with others representing Tucumcari and Lordsburg.
The three-member New Mexico Racing Commission will make the final decision. Eventually. At least in theory.
Further complicating the issue is a contested feasibility study and a related ongoing litigation. While a commission appointed by previous Gov. Susana Martinez, a Republican, delayed a final decision on the matter, incoming Gov. Michelle Lujan Grisham, a Democrat, has appointed a new panel but also has asked for more information on the issue.
This seemingly small matter has commission members wringing their hands.
At the Route 66 Casino, Ken Mimmack, business development and gaming operations, for L&M Entertainment, explains features of a Racetrack and Casino called the Curry Downs in Clovis. (Albuquerque Journal)
Give Commission Chairwoman Beverly Bourguet credit for candor. Like her fellow commissioners Billy Smith and David Sanchez, she doesn’t appear to have a clue about what to do next.
“We could continue our review, we could decide to grand, we could decide not to grant,” she said in an Associated Press report following the commission’s recent meeting. “We don’t know exactly what we’re going to do. We all need to get up to date.”
Let’s try to keep this in perspective for a moment. New Mexico’s racetrack casino industry in 2017 generated $59.7 million in gross gaming revenue, according to the American Gaming Association’s State of the States 2018 survey, with much of that circulating back into the tracks to enhance racing purses. The state’s racinos themselves suffered a revenue decline for the third straight year at a time of increased competition in other areas of the gambling market.
Those five active racino licensees don’t really mount much of a challenge to the gambling supremacy of the state’s 28 tribal casinos. In 2017 they generated $708.8 million in machine revenues alone, according to the AGA and the New Mexico Gaming Control Board. (Tribal table games revenues weren’t provided.)
This may be a cynical perspective, but those chasing that final racino license may eventually regret winning it. The market for casino action at the state’s racetracks seems viable only as long as Texas continues to avoid legalizing commercial gambling. That position is increasingly rare in a gambling America.
The spread of legalized sports betting is another area that complicates the future of racinos. A sports book at a racetrack that already allows race wagering seems like a sure-winner and a no-brainer. Despite the threat of litigation, three New Mexico tribal casinos have added sportsbooks – two operated by Las Vegas-based US Bookmaking and a third managed by Las Vegas-based Gaughan Gaming. (New Mexico also has a bustling slot machine culture operating under state sanction via authorized nonprofit organizations.)
The Martinez administration listened to struggling racetrack operators that have come to rely increasingly on racino revenues. In 2017, she signed a bill that allowed operators earning less than $30 million annually in machine revenues to cut back their racing schedule from four to three days a week.
Some may begin to wonder whether in a few years the licensees will evolve into slot machine operators who also offer horse racing.
While tribal governments are certain to be watching the racino licensing question closely, others in the state may begin to wonder about the oddly antiquated notion of allowing one form of gambling on a property but banning another form. If tracks are approved to offer race wagering, preventing them from also giving customers slot machines, table games, and sports betting seems unnecessarily restrictive.
That, of course, is heresy among tribes that depend on casino profits as large economic drivers for their members. And it’s also true that New Mexico has come to rely on the millions generated by all forms of legalized gambling in the state.
Contact John L. Smith at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith.
