Veto of pari-mutuel wagering on historic horse races sustained

Senators declined to override a gubernatorial veto April 18 of a bill that would have authorized the state Racing Commission to license and regulate pari-mutuel wagering on historic horse races.

An historic horse race creates a pari-mutuel pool via instant racing terminals from wagers placed on a previously held race at a licensed racetrack.

Lawmakers had passed LB806, introduced by Omaha Sen. Scott Lautenbaugh, April 5 on a vote of 26-18. The bill subsequently was vetoed by Gov. Dave Heineman.

The bill would have established a Historic Horse Racing Distribution Fund comprising taxes collected from the races and licensing fees, which would be $1,000 per machine.

Half of the fund’s proceeds would be credited to the Racing Commissions Cash Fund to be used for programs that facilitate equine therapy for youth and veterans and the other half would be directed to the Compulsive Gambler’s Assistance Fund.

Under the bill, historic horse racing would end if it were found by a court to allow any additional Class III gaming as defined in the federal Indian Gaming Regulatory Act.

Authority to license and regulate historic horse racing also would terminate if specific criteria were not met within four years of continuous use of instant racing terminals, including:
• construction of a race track enclosure in a county that contains a city of the primary class;
• a 25 percent increase in purses compared to 2011; and
• a 30 percent increase in the number of live horse racing days at tracks with instant racing terminals in counties other than Douglas, or a 40 percent increase in Douglas County.

In his veto message, the governor said LB806 represents an unconstitutional expansion of gambling in the state.

Heineman said that while the Nebraska Constitution permits betting on the results of horse races by the pari-mutuel method when conducted in a licensed racetrack enclosure, this exception to the general prohibition on gambling in the state does not apply to “slot-machine betting” on past races.

Lautenbaugh said the bill simply would allow a struggling industry to help itself through innovation.

“This is not expanded gambling,” he said. “This is a technological upgrade for horse racing, plain and simple.”

Ogallala Sen. Ken Schilz supported the motion to override the governor’s veto, saying the bill would maintain jobs and a long tradition of horse racing in Nebraska. He said questions of constitutionality should be settled elsewhere.

“If there is a question with the courts, let the courts figure it out,” he said.

Sen. Bill Avery of Lincoln opposed the override motion, saying the bill would not be enough to save an industry that has lost its appeal. He said previous legislative efforts to support horse racing in Nebraska have fallen short and suggested LB806 would as well.

“This is not the kind of help they need,” he said. “[This bill] will not save the industry.”

Scottsbluff Sen. John Harms also opposed the override effort, saying the bill would illegally expand gambling in the state. While acknowledging the struggle of people in the horse racing industry, he said the state’s constitutional prohibition is clear.

“I’m not against horse racing,” he said. “I’m against the expansion of gambling.”

Senators voted 28-20 on the motion to override, two votes short of the number required.

Lautenbaugh then filed a motion to reconsider that vote, saying lawmakers should think twice about the jobs that would be saved by supporting the horse racing industry.

“This is about jobs. Not hypothetical jobs … but ones that are here right now,” he said.

The motion to reconsider failed on a 29-20 vote and the governor’s veto of LB806 was sustained.