Hearing held on stalled racino license

A Logan attorney during an online court proceeding Wednesday grilled the director of the New Mexico Racing Commission amid a lawsuit to prod the entity to award a sixth horse-racing license that might allow the opening of a horse-racing track and casino in Tucumcari.

Logan attorney Warren Frost, on behalf of Coronado Partners that seeks the Tucumcari racino, filed a petition a writ of mandamus in December against the racing commission. A writ of mandamus asks a court to compel another entity to perform its official duties. The commission has asked the suit be dismissed.

Albuquerque Presiding Civil Court Judge Nancy Franchini, who oversaw the court hearing by videoconference Wednesday, said she would issue a ruling this week after Frost and commission lawyer Richard Bustamante submitted their final arguments in writing by May 31.

Racing Commission director Ismael “Izzy” Trejo testified the commission was advised in 2018 to prepare to issue the sixth and only remaining racing license in New Mexico. Such a license is required for a venue to open a racetrack and then acquire a gaming license for casino operations. Trejo said he had no objections at the time for a sixth license.

Coronado Partners, one of five applicants for the license, had proposed a racino on Tucumcari’s east side that would have employed 500 to 600 people and generated up to $55 million in revenue by 2025.

The commission held hearings in each of the applicants’ towns, including Tucumcari, Clovis and Lordsburg. Commissioners were prepared to make a final decision in December 2018 on the license, only to be stopped by an injunction by Lordsburg-based Hidalgo Downs.

Trejo testified there was dissension within the commission whether it should proceed, but the attorney general’s office discouraged it. Commission Chairman Ray Willis said he would issue a letter to Gov.-elect Michelle Lujan Grisham to continue the process, but Trejo said he did not know whether the letter was sent.

The commission placed “further discussion and actions” on a sixth racing license on its meeting agenda for April 30, 2019. The governor fired the commission, and the meeting never was held.

Lujan Grisham appointed a new racing commission, which held its first meeting in May 2019.

Trejo said the sixth license didn’t appear on the agenda of any commission meeting until January this year, after Frost filed his petition.

Trejo testified the sixth license was “put way down on the priority list” due to more pressing issues. He said two commissioners soon were replaced, and another died. He said since mid-2019, it has operated with a full commission for only five months.

Trejo also said the commission also has been dealing with the COVID-19 pandemic, other lawsuits, a U.S. Supreme Court ruling that legalized sports betting nationwide and federal Horse Racing Integrity & Safety Act that takes effect in July.

He said the U.S. racing industry in general is dealing with a decline in the number of thoroughbreds, which has dropped by 50% since 2000.

Trejo said he has not discussed a sixth license with the commission and has advised it to “hold off on starting the process over again.” He said it may “take a year or two” to order another feasibility study on a sixth license, and he was resistant to award one now.

“To issue a license like that is negligent to the industry,” Trejo testified. He later said a sixth license would have “negative ramifications” to New Mexico horse racing.

Bustamonte also emailed Frost about the sixth license earlier this year, stating “at this time, the commission will not be considering any such proposal whatsoever.”

Trejo said he had “no conversations” with Lujan Grisham or her office since she was elected governor.

Bustamonte asked Trejo what the horse-racing industry would look like in five years. Trejo said that is difficult to forecast, but added: “I foresee a lot less racing across the country.”

He said big venues in New York, California and Kentucky would “monopolize” racing and make it difficult for New Mexico.

Trejo also said the racing commission “has not denied” Coronado’s application.