The History of Legalized Gambling in New Mexico - Part II - June 9, 2011

...Las Vegas style gambling would be the death of the industry...

The first legalized and regulated gambling in New Mexico was horseracing.  The first race track went up in New Mexico shortly after the end of WWII.  Racing flourished in the Land of Enchantment for nearly four decades at race tracks in Raton, Santa Fe, Albuquerque (State Fair), Ruidoso, Sunland Park and Farmington.    Quarter horse racing became very popular as the cowboy-style horse would compete in sprints from 220 to 870 yards.  The All-American Futurity, held every Labor Day at Ruidoso Downs, was the richest quarter horse race in the world with purses exceeding $1 million.

The legalization of horseracing in Texas in the late 80s and other factors began to take its toll.  The introduction of simulcasting---basically off track betting with the races run live on video monitors---failed to reverse the downward turn.    As purses shrunk it was becoming harder and harder for track owners, horse owners, trainers, jockeys, etc. to make a living.  Plus, horse racing was starting to feel the impact of the first level of Indian gaming. 

Native American lands are sovereign, meaning they govern themselves and their lands. In 1979 the Seminoles in Florida began operating bingo and by 1988 Congress had passed the Indian Gaming Regulatory Act that provided for different classes of gaming.  Several New Mexico tribes started Class I and Class II gaming which was mostly bingo or pull tabs (tickets with perforated windows that the buyer would open to reveal a prize).   But the New Mexico tribes wanted to open Class III gaming, basically Las Vegas style gambling with slot machines, black jack, craps and roulette.

In 1990 then New Mexico Governor Bruce King appointed a task force who negotiate gaming compacts with the Pueblo of Sandia and the Mescalero Apache Tribe.  Governor King, a conservative democrat whose Baptist beliefs were well known, refused to sign the compacts.  It may have cost him his bid for re-election.  King had been governor twice before but term limits at that time prevented him from running for a second consecutive term.   Tribal officials for most of the New Mexico tribes, who had supported King in the past, gave their money and votes to his opponent, political maverick Gary Johnson.

King had managed to squeak out election victories in the past but his margin in the usually strong northern counties slipped due in part to a 3rd party Hispanic candidate (Roberto Mondragon) and likely less votes from Native Americans.

Johnson won and in 1995 he signed the compacts as well as approved a statewide lottery.  The first casino of note in northern New Mexico was the Cities of Gold Casino in Pojoaque.  The tribe had purchased an old school building and converted to a full-fledged casino in 90 days.  On July 4, 1995 the Cities of Gold opened to huge crowds.  

The horse racing lobbyists knew that Las Vegas style gambling would be the death of the industry and successfully got provisions in the compact that allowed a limited number of slot machines in race tracks (no table games were allowed).  Under the provisions part of the slot revenues would go to the state as a tax and part of it would go to subsidize the purses.    Tracks could stay open year around and the floundering horse racing industry would survive.   (Fraternal organizations also successfully lobbied for and received permission to have slot machines).  

It was suddenly profitable to operate a racetrack/casino and this led to the opening in 2004 of Zia Park & Black and Gold Casino in Hobbs (ten miles from the Texas border).    A license was granted and later rescinded for a new facility in Raton (Tucumcari and Santa Fe were also considered).  The future of that lucrative license is in the hands of Governor Susana Martinez and the New Mexico Racing Commission.

But the story of Indian gaming does not end there.  Legal battles between the state and the tribes ensued over the percentage of the “revenue sharing” the tribes had to provide to the state and the non-payment of the revenue.   Eventually all tribes settled and new compacts were signed.  

In the next column:  Gaming is a lucrative business.