The following is an excerpt from a comprehensive report on Retama Park and the Straus Family. To learn more about the Retama boondoggle and cast of unsavory characters who brought it about, click here.

First things first… the only reason gambling on horseracing exists in Texas today is the Straus family.

Speaker Joe Straus III’s grandfather, Joe Straus Sr., was involved with the horseracing industry before it was legalized and then outlawed again in the 1930s. It was outlawed in 1937 after just five years of operation because it substantially underperformed economic projections. This is a recurring issue with the current iteration of legalized pari-mutuel gambling.

Joe Straus Jr. was the driving force behind getting pari-mutuel gambling legalized again in 1987. He was lobbying as far back as 1966, but formalized and energized his efforts in 1973 when he founded the Texas Horse Racing Association. His activity between 1973 and 1987 culminated with the passage of the Texas Racing Act by the Texas Legislature during a downturn in the oil industry.

After selling lawmakers and the public on the viability of pari-mutuel gambling on horse races and convincing them to adopt a constitutional amendment to legalize it, Straus reneged, claiming that it was not going to be profitable under the terms he proposed and Texans consented to in 1987.

Straus Jr., who had been lobbying for betting on horses for 21 years, claimed ignorance to the problems with the legislation he helped pass. “The problem is we passed a bad bill,” he said. “None of us knew what the hell we were doing.”

The Straus family asked for and was eventually given an 80% tax cut by Democratic Gov. Ann Richards. Only after they were awarded the tax cut did Straus began to pursue the construction of a Class 1 race track in the San Antonio area.

In 1995, during the 74th Legislative session, Senator Jeff Wentworth passed a resolution crediting Straus Jr. and the Straus Family with the creation of Retama Park.

The Straus name is synonymous with the track. One headline from 1996, while the park was going through bankruptcy, read Retama Park Still the House of Straus.

The public-private nature of Retama, its bankruptcy, and its various acquisitions has led to confusion about Straus’ ownership interest in the track. Straus and his family continue to have a stake in the track and would reap a windfall if gambling were expanded in the future.

Speaker Straus still stands to gain from the legalization of gambling and has an interest in Retama through his family connection and stake in the Straus 2003 Irrevocable Trust.  At a Texas Tribune event following the acquisition of Retama by Pinnacle Entertainment, Straus said that his family stood to gain financially should historical racing machines (slot machines) be installed at Retama.

Pari-mutuel gambling in Texas and the failure that it has been over the last three decades can be laid at the feet of one family.

The Straus family used a small town to off-load risk and run an enrichment scheme that left vendors and bondholders out tens of millions of dollars.

As they had from the beginning, the Straus family had worked to minimize exposure to risk on the project. When the track declared bankruptcy in 1996, the Straus family investment was reported to be less than $4 million of the $80 million spent to build it.

To learn more about the Retama Park boondoggle, read the complete report here.

Tony McDonald

Tony McDonald serves as General Counsel to Texas Scorecard. A licensed and practicing attorney, Tony specializes in the areas of civil litigation, legislative lawyering, and non-profit regulatory compliance. Tony resides in Austin with his wife and daughter and attends St. Paul Lutheran Church.