Total wagering on races held at Sam Houston Race Park in Houston this year has plummeted 91 percent compared to betting last year through the first two weeks of the meet due to the inability of the track to accept bets from out-of-state markets. Total wagering has dropped from $11.75 million on six days of live racing last year to $1.04 million on seven days of live racing this year, according to records obtained through the Equibase database. The average per-race handle has dropped from $217,595 to $16,697, a decline of 92.3 percent. The decline is leading to concerns that racing in Texas is unsustainable without the ability for tracks in the state to make their signals available to bettors in out-of-state markets. Last year, the Texas Racing Commission declined to authorize out-of-state betting to evade regulation by the Horseracing Integrity and Safety Authority, which was given jurisdiction over any races simulcast across state lines through its 2020 federal enabling legislation. Sam Houston, which began its 2023 meet on Jan. 6, has doled out $1.55 million in purses so far this year, or $502,000 more than its total handle. A portion of purses at Texas tracks are generated by sales taxes on horse-related expenditures, through a fund set up by the state legislature in 2019. Those subsidies have mitigated the financial impact for racetrack operators, track operators said. Despite the negative cash flow from racing operations, Sam Houston has no plans to cut back on purses or live racing days, according to Chris McErlean, the vice president of racing for the track’s parent company, the gambling giant Penn Entertainment. Track officials were aware last year that it was unlikely that Sam Houston would be able to simulcast out of state, so Thoroughbred racing dates were pared from 50 live cards in 2022 to 43 this year, and the track has tightened the belt on its expenses, McErlean said. :: DRF Bets players have exclusive access to FREE DRF Past Performances - Classic or Formulator! Join today.  “Our team is doing a good job down there under difficult circumstances,” McErlean said. “We planned for this to happen, and the plan is going okay.” Texas is a difficult state for live racing under any circumstances. The state is the only major racing jurisdiction in the U.S. that does not allow for any kind of account wagering, a prohibition that restricts betting to live racetracks and a handful of simulcast sites spread across a massive geographical area. Yet horse racing, the concept, has support in the legislature, given the deep roots of the state’s ranching industry and an identification with a glorified version of the history of the U.S. West. Those cultural touchstones contributed to support for the 2019 legislation establishing the purse-subsidy fund. Racing interests are intent once again on plumbing those sentiments this year, with efforts underway to push for legislation that would provide “alternative” sources of revenue for racetracks, a euphemism for slot machines, sports betting, or casinos. As a result of that push, the racing industry as a whole is not likely to express any disunity in 2023 over the loss of out-of-state simulcasting when it will need to present a united front to legislators on any effort that could lead to casinos. That’s still a heavy lift in Texas. The state’s constitution explicitly outlaws any form of gambling other than pari-mutuel horse racing or the lottery, and so a constitutional amendment would likely be needed to move forward. The state legislature, which is controlled by Republicans, began its 2023 session on Jan. 10, and casinos have not been ruled out, according to an interview of Dade Phalen, the House speaker, in the Texas Tribune. “I want to see destination-style casinos that are high quality and that create jobs that improve the lifestyle of those communities,” Phelan was quoted as saying. Amy Cook, the executive director of the state’s racing commission, said that the steep drops in handle that have affected Thoroughbred racing in the state since the commission declined to approve out-of-state simulcasting last year is not a “great situation,” but she also said that out-of-state simulcasting at Texas tracks accounts for approximately 15 percent of total purse distribution, due to the subsidies created in 2019 and the greater share of ontrack handle that goes into the purse account. “It’s not as dramatic as it might be in other states,” Cook said. “Eighty-five percent of the purse account is untouched.” :: Get Daily Racing Form Past Performances – the exclusive home of Beyer Speed Figures To Cook, the solution to resolving the dispute lies in HISA being restructured under a so-called master cooperative agreement, which combines federal funding with state funding to achieve industry uniformity. Cook has outlined that solution in a number of letters to industry groups and publications, and she has urged both critics of HISA and HISA itself to contemplate the restructuring. For now, Cook said, any other solutions do not appear to be on the horizon. Under the Texas Racing Commission’s interpretation of the state’s racing statutes, a federal agency cannot be responsible for any aspect of regulation of racetrack operations, Cook said. Other Texas statutes prevent state agencies from providing funding for federal efforts, according to Cook. Until there is a resolution, Cook said, Texas tracks will continue to be blocked from sending their signals out of state. “The horsemen are fully aware of that,” Cook said. McErlean said he hopes that a resolution is forthcoming, if not in time for this year’s Sam Houston meet, then in time for next year’s. Penn Entertainment is a public company, and public companies are not known for waiting out money-losing propositions. “We’re hoping it gets resolved one way or another, in a way that is satisfactory to everyone,” McErlean said. “Long-term, this is not sustainable.” :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.