Horse tracks object to proposed compacts

DEBORAH BAKER

Monday, Dec. 20, 1999 | 6:37 a.m.

SANTA FE - The horse racing industry has been revitalized by slot machines and should not be hobbled by proposed new agreements with Indian tribes, track operators and regulators said Monday.

They objected to provisions of the proposed compacts that tie Indian casino payments to the level of gambling at tracks.

Under the proposal, what the tribes owed the state would be reduced or eliminated if new tracks were licensed or more machines were allowed.

Knowing the state would lose money would "weigh heavily on each of the commissioners" as they decide how to vote on any new license, said Racing Commission Chairman Billy Blackburn.

And it would tie the commission's hands for the next 22 years, the length of the proposed compacts, he said.

The agreements negotiated by Gov. Gary Johnson and Indian tribes, under review by a legislative committee, would cut the tribes' revenue sharing by half for each new track; by 1 percentage point - from 7 percent to 6 percent, for example - for every additional 100 machines authorized; and by one-half percentage point for every additional hour gambling is allowed.

At the four tracks currently in operation - Sunland Park, Ruidoso Downs, SunRay Park and the Downs at Albuquerque - 300 machines are allowed to operate for 12 hours a day. The Downs at Santa Fe, which a Nevada firm wants to buy from Pojoaque Pueblo and reopen - would also qualify as an existing track under the new compacts.

But licensing tracks that are proposed for Raton and Hobbs would gut the revenue sharing, and representatives of those projects objected to the proposed agreements as well.

"We at Raton do not consider La Mesa Park as a new facility," said Mark Roper, executive director of the Raton Chamber and Economic Development Council.

The Raton track was the first licensed in the state and operated for 46 years, he said. The license request for a revived track is pending with the Racing Commission.

Janet Seagrave, executive director of Lea County Economic Development, promoted the Hobbs track as a "tremendous opportunity" in an area that badly needs jobs and recreation and could draw heavily from neighboring Texas.

Track operators suggested that giving them more machines - or allowing them to have full-scale casinos - would create hefty and reliable revenues for the state, as opposed to the dwindling and unreliable revenue from Indian casinos.

Sunland Park Racetrack and Casino, on the Texas line south of Las Cruces, is paying about $8 million a year in taxes to the state, said lobbyist Chuck Brooke. That could increase to $11.8 million with 200 more machines, $15.3 million with 500 more machines, or $37.5 million with 2,000 machines, 75 table games and round-the-clock operations, he told the Committee on Compacts.

After nine months of slot machines, attendance at the track is up 45 percent, betting on races is up 9 percent, the number of live race days has increased, and purses are up 60 percent over last season, Brooke said.

"We've had positive spillover effects from our casino side to the track side," he said.

Ray Walters, president of SunRay Park and Casino at Farmington, said the track is succeeding with its strategy of trying to keep an estimated $80,000 a day from bleeding out of New Mexico into neighboring Colorado's Indian casinos.

"We've recaptured about half of it," he said.

"We do that although we have one hand tied behind our back," with the number of machines and hours limited, he added.

The current compacts require tribes to pay the state 16 percent of their slot machine proceeds, but most aren't paying in full. The tribes complain the figure is illegally high.

Frank Chaves, chairman of the New Mexico Indian Gaming Association, told the committee if the Legislature rejects new compacts, the three tribes that are paying in full may stop doing so.

Those tribes "will have to carefully consider whether continuing the payments is a wise choice, at that point," he said.

Attorney General Patricia Madrid, appearing before the committee, reiterated that if new compacts aren't enacted to resolve the payments dispute, she will take the tribes to court next spring in an effort to force them to pay up.

"I am not as pessimistic as John Kelly. I think the state has a very arguable position," she said.

U.S. Attorney Kelly said recently the state would have an uphill battle if it went to federal court to try to collect under the current compacts. Madrid has previously assessed the state's chances at 50-50.