Business leader changed horses, racetracks sayLobbyist who offered services on slots now backs license auction
By DAVE MICHAELS / The Dallas Morning News
March 25, 2005
AUSTIN – The leader of Texas' largest business association is endorsing a proposal that would make it more expensive for racetracks to operate slot machines – just weeks after the tracks turned down his offer to promote their interests in a statewide campaign.
Bill Hammond, president of the Texas Association of Business and one of the state's most powerful lobbyists, recommended to his group's executive committee on March 18 that it endorse a requirement to auction licenses for slot machines. In a memo, Mr. Hammond wrote that bidding would raise between $2 billion and $4 billion for the state, which would issue the licenses.
But just two weeks ago, Mr. Hammond offered to tout the racetracks' position – that bids are unnecessary because slot machines would raise plenty of revenue for the state and that tracks, which already feature betting, are a natural home for the machines. Tommy Azopardi, the executive director of the Texas Horsemen's Partnership, said his group turned down Mr. Hammond's overture several weeks ago because the group's budget could not accommodate more lobbyists.
"That is very disappointing that he'd be taking that approach," Mr. Azopardi said Thursday of Mr. Hammond's recommendation for an auction.
Mr. Hammond did not return a phone call seeking comment. In a written statement, he said his recommendation is consistent with the association's philosophy.
"As we have for years, we support VLTs at racetracks and now are also considering supporting the auctioning of VLT licenses," he said, using an abbreviation for "video lottery terminals," the technical name for the slot machines. "If TAB were to support auctioning, it would be because it would produce more non-tax revenue for the state."
Texas lawmakers are considering several proposals to legalize gambling. A popular plan calls for putting slot machines at horse and greyhound racetracks. The tracks, which are losing money, want exclusive rights to operate the machines as a way to boost their revenue.
Some lobbyists and lawmakers have suggested out-of-state casinos are pushing for the state to take bids. In the past, the casinos have opposed slots at Texas racetracks, concerned it would reduce the number of Texans gambling at casinos and racetracks in Louisiana and New Mexico.
"If I was an out-of-state casino, that is the position I would take," said Elton Bomer, a lobbyist who received Mr. Hammond's original offer. "I would want to auction off these things, which would give me a better chance of getting them."
Some lawmakers are uncomfortable with giving an exclusive license to racetracks to operate slots. They say the state is giving up money it could earn by auctioning the licenses to the highest bidder.
Track operators argue that an auction would delay the start of gambling and thus the flow of money to the state. The tracks say they are ready to set up the machines and begin wagering as soon as the Legislature and voting public approve new gaming.
Craig McDonald, director of watchdog group Texans for Public Justice, said Mr. Hammond's quick change of position makes it "look like Mr. Hammond has put the TAB up for sale to the highest bidder."
"These types of side deals should be disclosed, so people know that when TAB is speaking, it is speaking out of financial self-interest, rather than for the good of its members," Mr. McDonald said.
Mr. Hammond originally approached Reggie Bashur, a key lobbyist for racetrack interests, with his offer, Mr. Bomer said. Mr. Bashur then relayed the message to Mr. Bomer, who took it to Mr. Azopardi.
"They offered to support video lottery terminals at racetracks as a non-business tax," said Mr. Bomer, who represents the Texas Racing Agri-Industry Council.
In the past, racing interests paid Mr. Hammond's group to promote that argument in media events across the state, Mr. Bomer said. He said he did not consider that work to be lobbying. Two years ago, the racetrack interests reimbursed the TAB between $100,000 and $150,000 "for expenses they were incurring," he said.
Mr. Hammond, a former House member from Dallas, is a powerful lobbyist in Austin. He also is a potential target of an ongoing Travis County criminal investigation about whether his association's $1.8 million "issue ad" campaign in 2002 statehouse races amounted to illegal corporate spending in an election.
In reports filed with the Texas Ethics Commission, Mr. Hammond has not disclosed any payments from racetrack interests. Mr. Hammond's only client is the Texas Association of Business, according to lobby registration reports.
The association has not filed any documents that suggest it worked for other interests.