New Mexico Racino Bidders Call Out ‘Secret Settlement’ in Increasingly Fraught Tender Process

The tender to find a buyer for New Mexico’s sixth and final racino license has proved to be trickier than expected, but events took a turn for the even-worse this week when some bidders accused the gaming regulator and the State Attorney General’s Office of negotiating with a rival, Hidalgo Downs, behind their backs.

Under existing compacts negotiated between the state and its 14 tribal operators, only six racinos are allowed in New Mexico. Hidalgo Downs is one of five companies vying for the license, the winner of which was scheduled to be announced in December 2018.

But just days before the expected announcement, Hidalgo filed suit against the AG’s office demanding a preliminary injunction to halt the process.

The lawsuit claimed that a feasibility study on all five bidders, conducted by analysts for the New Mexico Racing Commission (NMRC), was flawed because it suggested the Hidalgo Downs proposal would generate less slots revenue than competing bidders and therefore less revenue for the state.

Settlement Reached With Hidalgo Downs

Hidalgo, which wants to build a racetrack in Lordsburg, Hidalgo County, southwestern New Mexico, claimed the NMRC study was little more than a “marketing plan” for a rival proposal from Full House Resorts of Las Vegas.

This week the State Attorney General’s Office and lawyers for the NMRC announced they had negotiated an out-of-court settlement with Hidalgo that will allow the tender process to resume.

But with so much at stake, rivals want to know exactly what was discussed during these closed-door proceedings.

According to the Santa Fe New Mexican (SFNM), lawyers for the bidders argued at a hearing Thursday that open-meeting laws may have been violated because the NMRC never voted on the settlement.

Demand for Transparency

Attorney for for L&M Entertainment Alicia Sanasac said her client had spent over $1 million preparing and developing their application.

Our interests are jeopardized and we stand to lose a lot,” she told the judge, as reported by SFNM. Sanasac asked that the process take place “in the public light.”

Warren Frost, who represents a group that wants to build a racino along Route 66 said he had learned there was another study that had not been made public, and raised questions about some NMRC commissioners’ links to the racing industry, claiming “the fix is in.”

Existing racetracks oppose the establishment of another racino because they believe it will cannibalize the revenues of an industry that is already struggling.