- Associated Press - Thursday, April 4, 2019

ALBUQUERQUE, N.M. (AP) - More questions were raised in court Thursday about a lack of transparency and conflicts of interest as New Mexico stumbles through a process that ultimately will decide who wins a lucrative license to operate the state’s sixth and final horse racetrack and casino.

At issue is a contested feasibility study that looked at the economics behind the five pending proposals. One of the enterprises vying for the license, Hidalgo Downs LLC, has argued that the state hasn’t done enough to study the matter.

Attorneys for the other applicants agree that the study is flawed but they told a state district judge during Thursday’s hearing that they have grave concerns about a proposed settlement that would resolve Hidalgo Downs’ claims.

The settlement became public late Wednesday, a day before attorneys were due in court to argue whether their clients would be allowed to intervene in Hidalgo Downs’ case.

Some attorneys told the judge it appeared that the settlement was negotiated in secret by Hidalgo Downs, the state attorney general’s office and Ray Willis, the chair of the state racing commission.



They argued it’s possible that open meeting laws were violated since the commission never voted on the settlement and more lawsuits could follow if the judge were to sign off.

Alicia Sanasac, an attorney for L&M; Entertainment, said her clients spent several years preparing their application to build a racino in the Clovis area. More than $1 million has been invested in an effort to secure financing, develop marketing plans and draft a proposal that would generate revenue and taxes for the state.

“Our interests are jeopardized and we stand to lose a lot,” she told the judge, asking that he ensure the process take place “in the public light.”

Under the proposed settlement, the commission would agree to “fully and fairly” assess all five candidates before awarding the license. However, the commission would not be allowed to consider the recommendations outlined in the feasibility study, which found that Hidalgo Downs’ proposed racino would produce significantly less revenue and taxes than the projects proposed for Clovis and Tucumcari.

Warren Frost, an attorney for a group that wants to build a racino along historic Route 66 in eastern New Mexico, told the judge he has learned of a second study that also was not voted on by the commission and has not been made public.

He also pointed to the connections some commissioners have with the horse racing industry.

“We’re concerned that the fix is in,” Frost said, suggesting that the commission would have a difficult time being objective.

The commission over recent months repeatedly delayed taking a final vote on awarding the license, saying the legal dispute needed to be resolved before the regulatory panel could move forward.

Willis, the chair of the commission, did not return messages seeking comment. He has said previously that the panel is committed to seeing the process through and awarding a license.

Gov. Michelle Lujan Grisham, who took office Jan. 1, also weighed in earlier this year and requested more information regarding the selection process.

The governor has control over the racing commission. She could allow it to issue the license or block it from doing so by appointing new commissioners.

Campaign records show Lujan Grisham received political donations from the five existing racinos and their owners as well as from individuals and companies with ties to at least two of the applicants seeking the license.

In all, the applications include three separate proposals for a racino in the Clovis area, one in Tucumcari and Hidalgo Downs’ proposal for Lordsburg.

The state’s existing racinos have voiced concerns about adding a sixth venue, saying doing so would hurt their business. In a Nov. 13 letter to the commission, they described New Mexico’s racing industry as “far from healthy and not in need of additional forces creating additional downward pressures.”

Under state compacts with casino-operating Native American tribes, only six racinos are allowed in New Mexico. The five existing establishments are in Hobbs, Ruidoso, Farmington, Albuquerque and Sunland Park.

Frost said his clients have spent hundreds of thousands of dollars on preparing their application and that the effort is just as much about corporate entities making money as it is about boosting rural New Mexico.

“For Quay County and the city of Tucumcari, the chance of getting a racetrack may mean continued survival for our economy there,” he said.

Copyright © 2019 The Washington Times, LLC.

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