Gov. Susana Martinez has just five weeks left in office, but her administration isn’t calling it a day just yet. Among items still on the to-do list is deciding whether to award a license for a sixth – and final – racetrack-casino.
Five applicants are vying for that lucrative license, although a racing commission official has said it may decide to not offer a license to any of the bidders.
That may not be a bad idea given our endemic poverty and high-profile cases of problem gambling. On the flip side, racetrack-casinos bring in millions of dollars to state coffers.
Racinos are allowed to operate 600 slot machines (up to 750 in certain circumstances). By some projections, 600 machines could generate $46.4 million a year. Under state law, racinos pay 26 percent of what they net for the machines back to the state – generating more than $10 million. If that sways the racing commission to approve another racino, the last allowed under the Indian gaming compacts, the location should be one that attracts tourists from out of state.
One could argue the decision should be left to incoming Gov.-elect Michelle Lujan Grisham’s administration – but that would likely mean re-starting the bid process for companies that have invested big bucks in proposals. To avoid that, a decision to grant the license would need to be made by Dec. 31, Martinez’s last day in office.
The state Racing Commission issued a feasibility report earlier this month, conducted by New Orleans-based Convergence Strategy Group. And while it does not come down in favor or against a sixth racino, it does say Clovis, which is the site in three bids, would be the best when it comes to generating revenue – especially from out of state.
The five proposals being considered are:
• La Posada del Llano, a $200 million project that would be built in Clovis by Nevada-based FHR-Atlas LLC, whose sole member is Delaware corporation Full House Resorts.
• Curry Downs Racetrack and Casino, a $75 million project that would be built in Clovis by L&M Entertainment LLC, a joint venture between the Laguna Pueblo-owned Laguna Development Corp. and Illinois-based Miller companies.
• Clovis Racetrack and Casino, a $50 million project whose backers include former Ruidoso Downs President Shaun Hubbard and Hobbs businessman Johnny Cope.
• Coronado Park Racetrack and Casino, a $61.7 million project that would be built in Tucumcari by Coronado Partners LLC, whose members include New Mexico auto dealer Tom Krumland and Logan attorney Warren Frost.
• And Hidalgo Downs, a $75 million project that would be built in Lordsburg by Hidalgo Downs LLC, whose members include Washington attorney Francis Lame Bull and former New Mexico casino manager Denis Floge.
The racing commission will hold a special meeting and public hearing at 1 p.m. Wednesday at the Albuquerque Convention Center to get tribal comments – New Mexico only has legalized gambling because of the compacts, after all – and hear from applicants. As commissioners and the administration examine the bids, it is essential they consider:
• Who are the potential customers? The Curry Downs proposal estimates 80 percent of its revenues would come from Texas residents. That not only means this racino (and the other two in Clovis) would not be cannibalizing other gaming operations, but would truly bring new money into the state. (The current racinos are in Albuquerque, Farmington, Hobbs, Ruidoso and Sunland Park.)
• Are the plans realistic? The feasibility report questions the cost and safety of La Posado del Llano’s first-ever moving grandstand. And unlike Curry Downs, La Posada, Coronado Park and Clovis Racetrack and Casino have yet to reveal details of their financing.
• How will it treat the racing industry? Remember, racetracks are the only non-tribal sites where casinos are allowed. The feasibility report says Clovis Racetrack and Casino’s bid is low on race days.
There is much to consider and not much time to do it in. But careful consideration is essential, both of whether a sixth racino is prudent, and if so, who can deliver the best product. The last time a sixth license was offered, in 2008, a Canadian developer won it for a racino in Raton, then couldn’t get it over the finish line.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.