RACE TO THE SLOTS

A Rio Grande Valley family that contributes frequently to state and local political campaigns stands to gain millions if the Legislature legalizes slot machines at racetracks, including two tracks the family hopes to open on the border.

The LaMantia family is best known in the Valley as the owner of L&F Distributors, which supplies Anheuser-Busch beverages to 22 South Texas counties.

The Texas Racing Commission has agreed to accept an application from the LaMantias to build a Class 2 horse racetrack, complete with betting, somewhere in the McAllen-Mission-Edinburg area.

The family is also the largest interest holder in LRP Group Ltd., a partnership that has applied to build a horse racetrack in Webb County, according to the application filed with the Texas Racing Commission.

The Laredo track is projected to handle $38 million in bets its first year and make an annual profit of $1.3 million by its fifth year of operation, according to projections in the application.

By May 31, the time the application for the Hidalgo County track is due, the Legislature will have adjourned and the LaMantias will know whether they can add another revenue stream to their projections: electronic slot machines, referred to as video lottery terminals, or VLTs.

Racetracks, horse breeders, dog breeders and others in the gambling industry have lobbied strongly this legislative session to allow VLTs at racetracks.

They argue that the machines will revive racetracks and give struggling breeders a chance to compete with larger purses in neighboring states that already allow VLTs.

Greg LaMantia, a spokesman for the family, said the family will apply for the track in Hidalgo County regardless of whether VLTs are approved.

He said they did not make a special push in the last two years with lawmakers to legalize VLTs, but acknowledged he supports allowing the machines at racetracks.

"I think if the Legislature so chooses to put it out there, then it will be the will of the people, and then yes, it would be a good opportunity for the horse industry and the racing industry to have those available," LaMantia said.

But some said they wondered whether they would apply at all if not for the possibility of VLTs.

Investors otherwise would not want to build racetracks in a state that doesn't allow VLTs, said Suzii Paynter, director of the Baptist General Convention of Texas and an opponent of gambling expansion.

"I guarantee, they will not build them (if VLTs are not approved)," Paynter said. "The reasons they want these proposals is for VLTs.

"They want to build slot barns, not horse barns," she said.

State Rep. Ismael "Kino" Flores, D-Mission, thinks the applications will move forward regardless of the Legislature. He has worked for several years to bring casinos to Texas and allow VLTs at racetracks - both current ones and those in the application period.

If they don't pass this year, he said he will try again.

"Like with simulcasting and the lottery, you might not get it the first time, you might not get it the second time, but after a while - you know how investors are - they invest and hope for a return," Flores said. "This issue is not going to go away."

Without VLTs, racetracks will have a harder time, he said.

"I could see them making an existence, but I don't see them flourishing," Flores said.

Like other Valley legislators, Flores is a frequent recipient of campaign contributions from the LaMantia family and is chairman of the House committee that oversees alcohol licensing issues, often of great interest to beer distributors.

Some Democratic and Republican leaders have said they will not support the expansion of gambling and do not think it has the momentum to get the 100 House votes necessary for a constitutional amendment.

Flores said he is unsure of whether it has the votes, but on Thursday he still hoped for a hearing on his bills.

NOT JUST A RACETRACK?

The LaMantias hope a racetrack would be profitable even without VLTs, LaMantia said.

The increasing population and the success of Dodge Arena in Hidalgo and the baseball stadium in Edinburg suggest that the Valley is ready for an additional form of entertainment, he said.

"I think that would serve Hidalgo County well, to get that type of entertainment in that area," LaMantia said. "I think the Valley's hungry for it, and it would be good for the horse industry in the state."

LaMantia said his family is considering sites in the McAllen-Mission-Edinburg area for its horse racetrack.

He would not say what sites are being considered, but told the Texas Racing Commission in August that the site would be no closer than about 50 to 60 miles from Valley Race Park in Harlingen, which is opposing the Hidalgo County proposal.

LaMantia said it is too soon to release details of what services would be included at the racetrack.

"I think it would be a little premature to say, but I would hope that if we get the permit, that hopefully we would be able to get the other ancillary items to complement that, whether it be a nightclub or a hotel or what not," he said.

Increasingly, racetracks are relying on VLTs for revenue when they can, said David G. Schwartz, director for the Center of Gaming Research at the University of Nevada-Las Vegas.

Racetrack owners know that VLTs attract bigger crowds to the so-called "racino," and bring more money to support betterquality races, he said.

"It has a ripple effect," he said. "It's not just they get the VLTs, they get the revenue. That also brings more excitement to the races, so they get bigger purses."

After the LaMantias submit their application, the staff at the Texas Racing Commission will review it and will make a recommendation to the commission, said Paula Flowerday, executive secretary. While staff members review the application, the Department of Public Safety will conduct an extensive background check of all prospective owners of the racetrack.

The earliest the commission would vote on whether to grant the license is September, Flowerday said.

But that could be delayed if other applicants come forth to compete with the LaMantias for a Hidalgo County license, if background checks take longer than expected or if legal questions about the applications must be settled by an administrative law judge, Flowerday said.

STATEWIDE INFLUENCE

The LaMantia family is known to donate generously to Valley legislative races.

Nine out of the 10 Valley legislators have said they would vote to expand gambling under the right circumstances. State Rep. Aaron Peña, D-Edinburg, has said he has serious reservations about it, but might be swayed to vote for it as well.

From July 2003 to December 2004, state Sen. Juan "Chuy" Hinojosa, D-McAllen, received more money from the LaMantias than any other Valley candidate: $15,000.

Hinojosa said he would vote to expand gambling, and thinks Hidalgo County and neighboring Mexico would support a "first-class racetrack."

Hinojosa in 2002 ran in the most expensive Senate race in Texas history, in which he spent $1.2 million.

He is glad to have help from the LaMantias for his campaigns, but also because the family gives generously to community charities and causes, Hinojosa said.

But Hinojosa said he makes public policy decisions based on the needs of everyone in his district rather than those of a few contributors, when asked whether contributions from the LaMantia family would sway him to vote to expand gambling.

"I think that is a very legitimate question," Hinojosa said. "To some people, they look at who their contributors were. I do not do that."

Though far from the biggest players in the statewide elections, the family donates generously to Republicans and Democrats in power.

In 2003 and 2004 combined, the LaMantias gave almost $38,000 to Comptroller Carole Keeton Strayhorn and at least $15,000 to Gov. Rick Perry, both Republicans.

Strayhorn advocates approving VLTs. She estimated in March 2004 that adding VLTs to racetracks and gaming to American Indian reservations would bring a combined $1 billion and 30,000 jobs to Texas.

Perry has said he would leave any decision about gambling to the will of the Legislature, but thinks it would be hard to gather enough votes.

The LaMantia family's contribution record makes it clear that the family cares about many issues important to Texas, including education, taxes, business issues and the environment, LaMantia said.

"I think if you check, you'll find some that we have given to that are completely opposed to the idea of gambling," LaMantia said.

The family has not pressed for VLTs this year any more than it has for other issues it cares about, LaMantia said.

"We've been giving contributions for years, since I can remember, and it's all about hopefully having good government," LaMantia said.

"That's why we give to campaigns."

A racetrack in Hidalgo County would pump $300 million a year into the local economy and benefit many people who are not the LaMantias, including electricians, plumbers, real estate investors and bankers, Flores said.

"They've been contributors to a lot of people, even before they were trying to get a permit," Flores said.

JUST IN TIME

Flores' gambling-related bills are written in a way that ensures the LaMantia family will have the chance to offer slot machines at its racetracks in Hidalgo and Webb counties, if those tracks are licensed.

Both Flores and LaMantia said that was not by design.

Flores' bills would allow slot machines not only at licensed racetracks, but also at future racetracks, provided the applications were submitted to the Texas Racing Commission by June 1, 2005.

The LaMantia application for a racetrack in Hidalgo County is due to the commission one day earlier, May 31.

Flores filed his bill on March 14, more than six months after the Texas Racing Commission approved the Hidalgo County application deadline.

He wanted to expand the bill's deadline to include as many Hidalgo County applicants as possible, not just the LaMantias, Flores said.

"If Hidalgo County's going to have a running chance at it, we want to make sure that whoever has applied, they are in the mix," Flores said.

LaMantia said he doesn't remember having a conversation with Flores to make sure the bill included his application.

May 31 was likely set to maximize state revenue, LaMantia said.

"I would imagine that's just if they're trying to create as much revenue for the state, then they want to make sure as many were included as could be," he said.

---Elizabeth Pierson covers the State Capitol for Valley Freedom Newspapers. She is based in Austin and can be reached at (512) 323-0622.