While everyone was busy watching sports betting legislation, the Louisiana legislature passed a bill with another gambling expansion.
A bill passed with amendments by the House on Monday and concurred with by the Senate on Tuesday legalizes historical horse racing machines for off-track betting (OTB) parlors. The bill now heads to the governor for review.
Historical horse racing (HHR) games play like slot machines. But rather than using a random number generator, the games use results from past horse races through a parimutuel system. Instead of playing against the house, players bet against other people through a pool similar to typical parimutuel bets on horse races.
Louisiana has 17 off-track betting facilities around the state that are satellites to local racetracks. Fourteen are tied to Fair Grounds Race Course & Slots, three to Evangeline Downs Racetrack & Casino, and one to Louisiana Downs.
Bill sponsor Sen. Gary Smith says HHR revenue will bring more prize money for Louisiana horse races.
“With the bigger purse of course means bigger races, and bigger races means more for Louisiana,” Smith said. “We hope this will help us get some of the real bigger races as we get on the forefront of this.”
Legislative switcheroo brings HHR at late hour
As introduced and passed by the Senate on May 6, S 209 simply allowed racetracks to offer a lower takeout on pick-three, pick-four and pick-six wagers. Instead of taking 25% out of the pool, horse tracks can take out between 12% and 25%.
Three weeks later in the House Committee on Commerce, Senate President Page Cortez joined Smith to pitch the amendment allowing for historical horse racing.
Cortez explained HHR to lawmakers as similar to normal horse bets. He didn’t mention that it’s more like a slot machine than placing a bet at a ticket window.
“It adds to the parimutuel wagers that are out there. Currently you can bet on a win, place, show. This adds historic horse racing as a possibility. Historic horse racing is simply a parimutuel pool wager where you try to predict the winners of a race that occurred in the past. …
In this day and age in the competitive parimutuel wagering, every 30 minutes a horse race occurs live. But in the historic horse racing you can play horse races every minute or two minutes. The effect of that is it would put more money into purses and supplement this whole industry.”
Cortez incorrectly told the committee that New York had HHR, but correctly identified that racetracks in Kentucky and Arkansas do offer the games. Virginia also has historical horse racing. Michigan lawmakers are pushing a bill this session to save the state’s horse racing industry. And the New Hampshire governor just signed a bill authorizing HHR.
“There’s a lot of other states doing this and we’ve fallen behind,” Cortez said.
Louisiana historical horse racing language
Key details of S 209 include:
- Authorizes HHR on the premises of off-track wagering facilities via dedicated machines or personal mobile devices.
- Limits each primary licensee or licensed offtrack wagering facility to no more than 50
HHR machines into service at any given time.
- Instructs the Louisiana State Racing Commission to promulgate rules for and license historical horse racing.
- Limits HHR commissions to 12% of all wagers.
- Requires the licensee to disburse 20% of HHR revenue to horsemen’s purses.
The state would not tax HHR revenue. But lawmakers expect the overall boost to the horse racing industry to provide additional revenue to the state.
In Louisiana, each parish can have up to two OTBs and each track five OTBs. The Fair Grounds in New Orleans is allowed more. Each new facility would need authorization from the legislation and Racing Commission, as well as approval from voters of the parish in a local election.
“It’s just another alternative way to do parimutuel wagering,” Stefanski said. “There’s an argument to be made that we don’t need this legislation to do that. We can already do it. We’re being extra careful with this in order to put it into law to just make sure. We’ve seen Arkansas has done it and Kentucky has done it, and we’ve seen what it’s done is significantly help the horse industry because it provides more money into the purses.”
Controversy attached to HHR bill
The Advocate, a newspaper in Baton Rouge, called attention to a relationship between Senate President Cortez and a lobbyist for ELS Gaming, which provides historical horse racing machines in Virginia.
The newspaper reports that the lobbyist, Joel Robideaux, is a former legislative colleague and Cortez’s next-door neighbor. And it points out the unusual nature of the Senate President appearing before a House committee to pitch an amendment.
Cortez’s bill put no limits on the number of historical horse racing machines and didn’t require voter approval on additional facilities. Stefanski’s amendment added these limitations to rein in the legislation.
The allegations could give Gov. John Bel Edwards pause when the bill hits his desk. He’ll have 20 days to act on the legislation.