A blackout of simulcast signals from Texas Thoroughbred tracks in out-of-state markets is unlikely to end anytime soon, Texas racing participants said recently, approximately one year after an impasse between Texas regulators and the Horseracing Integrity and Safety Authority put Texas racetracks in a bubble. The impasse is unlikely to be resolved without a significant change of heart from HISA or Texas regulators or a major court action that would force the hand of either of the opposing sides. As it stands now, Texas racetracks, regulators, and horsemen have very little incentive to modify their positions or press for a resolution, leaving the industry in limbo. Despite the blackout, purses have barely been impacted: Although total purse distribution has declined approximately 12 percent since out-of-state simulcasts have ended, average purses at Sam Houston and Lone Star Park have gone up marginally, according to an analysis by Daily Racing Form, due to subsidies that horsemen receive from non-racing sources. :: Bet the races with a $250 First Deposit Match + $10 Free Bet and FREE Formulator PPs! Join DRF Bets. Elsewhere, the administrator of the state’s Texas-bred incentive program says that breeders’ awards remain at the same level as previous years and that the organization feels no pressure to push for a resolution. At the Texas Racing Commission, which contends that it is against state law to allow the federally created HISA to play any regulatory role in the state, officials continue to enjoy support for their position. Amy Cook, the executive director of the commission, said she was entirely satisfied with the current situation, contending that Texas racing has avoided “the chaos” that accompanied the rollouts of two sets of HISA rules, one in July of last year and the other in May, when HISA’s anti-doping and medication control program went into effect. “I think the Texas Racing Commission has provided regulatory certainty for all our racing participants, and we have avoided the chaos seen in other jurisdictions across the country,” said Cook. “Our rules are deliberately promulgated and consistently enforced. Everyone participating in Texas horse racing can be assured we will faithfully follow the law.” The blackout started last year on July 1, when HISA began enforcing its racetrack safety rules, using a date set in the federal legislation that created the private, non-profit company. Upon the arrival of that date, the Texas commission declined to approve Lone Star’s simulcasting application, citing the federal law creating HISA, which identified any race made available for wagering across state lines as being subject to HISA’s jurisdiction. Although the commission has since ruled that tracks are free to simulcast, both Sam Houston and Lone Star have declined to do so, citing potential legal peril. Without being able to simulcast, handle during the remaining days of Lone Star’s meet last year plummeted 78.9 percent on an average per-race basis, according to an analysis of figures on Equibase charts. This year, the average bet per race at Lone Star was down 75.6 percent compared to the pre-blackout figures of 2022. Yet average purse per race did not drop a similar amount – in fact, the average purse at Lone Star Park last year jumped 16.5 percent after the blackout began. This year, the average purse is up 3.6 percent. Wagering has been limited since the blackout to on-track and off-track sources within Texas. A similar dynamic has played out this year at Sam Houston. Handle at Sam Houston this year dropped 92.3 percent on a per-race basis compared to 2022’s meet, but the average purse was up 2.0 percent. In response to the blackout, both Lone Star and Sam Houston trimmed races from their schedule, accounting for a portion of the increase. But the principal reason that purses have stayed robust despite the cratering of handle is a law passed by the state legislature that sends state sales taxes on certain horse products, including feed and tack, into a fund to subsidize purses. The law, which went into effect in 2020, can distribute as much as $17.5 million in Thoroughbred and Quarter Horse purse subsidies every year. “If we didn’t have the tax bill, and we couldn’t simulcast, like we can’t now, we’d be done,” said Brent Davidson, a Texas trainer. “That would be it. We’d be shut down.” In fact, because of the subsidy, horsemen are now running for purses that are approximately 60 percent higher than purses in 2019. No wonder trainers are not particularly feeling put out by the fact that horseplayers in other states are incapable of wagering on their races. Mary Ruyle, the executive director of the Texas Thoroughbred Association, which administers the state’s breeding incentive program under state law, said that the subsidy fund has “basically” insulated trainers and breeders from the negative impacts of the simulcasting blackout. As a result, the organization has not taken any action to attempt to resolve the impasse, in favor of either side. “It’s basically wait-and-see for us,” she said. “We want to see how it plays out.” If any constituency in Texas racing would seem to have a beef with the impasse, it would be the racetracks, which are losing out on their share of the simulcast revenue (horsemen receive the other half) without the advantage of receiving a subsidy from the state to help soften the blow. But owners of the tracks are not talking. Matt Vance, the vice president of racing at Lone Star Park, which is owned by Global Gaming, did not return a phone call this week, as has been the case since the impasse began. Global Gaming, which is owned by the Chickasaw Nation, also owns Remington Park and multiple casinos in neighboring Oklahoma. It is a party to an ongoing suit filed against HISA seeking to have the authority’s legislation invalidated. Chris McErlean, the vice president of racing for Penn Gaming, which owns Sam Houston, declined to comment for this article. It’s an open secret in Texas that the racetrack owners are keeping their doors open in the hopes of getting casino-type gambling down the line. A bill introduced this year that would have allowed historical horse racing machines – which are similar to slot machines – went nowhere, but Texas remains one of the largest markets in the U.S. without any type of gambling aside from racing and the lottery. Tracks are so far willing to operate at a loss or small profit in order to keep those hopes alive, but the legislature in Texas only goes into session once every two years, so it won’t be until 2025 that tracks have another chance to pass a bill.  For small-time breeders, the impasse is getting on some people’s nerves. Colleen Davidson, Brent Davidson’s wife, is one of those breeders. She says she’s so far agnostic on HISA – it’s a lot of paperwork, she said, and Brent is unsure if HISA’s medication rules are realistic – but she’s also worried about the future of Texas racing without certainty on the horizon. “The breeders don’t know if they should keep breeding because they don’t know what’s going to happen,” Colleen Davidson said. If the situation is not resolved by the end of the year, Davidson said, she may have to consider cutting back on the number of mares she breeds. Hanging over the situation are two federal lawsuits that could resolve some questions regarding HISA’s constitutionality. One of the suits is in the Fifth Circuit Court of Appeals, but it is not expected to get resolved until the end of the year, at the earliest. If the Fifth Circuit rules that HISA is unconstitutional, the matter is likely to get sent on a path to the Supreme Court. But Cook said that any federal resolution to the matter will not impact Texas. “It’s premature to discuss any potential court decisions, but, regardless of outcome, a court cannot compel a state to opt into a voluntary agreement with HISA in violation of numerous state laws,” Cook said. So long-term, it’s business as usual, at least the usual that settled in after the blackout started. That prognosis is worrying, said one horseman who did not want to be identified because of the delicacy of the politics surrounding the impasse. “This is not good for the sport, it’s not good for Texas, and it’s not good for our brand,” the horsemen said. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.