The long-running battle for Texas racing, being waged in courtrooms and boardrooms by the warring owners of Pimlico and Laurel, tentatively has been lost by both of them.
A hearing officer recommended the Texas Racing Commission award a lucrative thoroughbred-track operating license to a group now running a small track near Fort Worth.
The final decision rests with the commission, which is set to rule next month, and the local investor groups say they still could win.
But the surprise recommendation is a setback for groups affiliated with both Joseph De Francis and Robert Manfuso, part-owners of Pimlico and Laurel, Maryland's major thoroughbred tracks. De Francis is president and majority owner.
Manfuso and his brother John, another part-owner of the Maryland tracks, filed a lawsuit against De Francis earlier this year that ultimately could determine who will own the tracks. The suit, in part, attempted to restrict De Francis from participating in the return of pari-mutuel racing to Texas, arguing that it took his time away from running the local tracks.
Texas outlawed pari-mutuel racing in 1937 but decided in 1987 to bring it back and authorized four major, Class I tracks statewide. Licenses have been granted for tracks in Houston and San Antonio, but construction has not begun.
For the Dallas-Fort Worth area, hearing examiner Dudley McCalla, an Austin attorney hired by the commission to sort through the applications in the politically charged process, recommended only one track. Of the four applicants, the one he selected, Trinity Meadows Raceway, was considered a dark horse candidate.
The track is 45 miles from Dallas -- on the far side of Fort Worth. Track management repeatedly has been cited by the commission for rules violations. The executive secretary of the commission filed testimony in the case saying he doesn't believe the track and its management are qualified to receive the license.
But McCalla said, "Approval of the license application of Trinity Meadows and the denial of the license applications of Lone Star, Midpointe and Pinnacle Park will be in the best interest of racing and the public."
The Lone Star group includes Pimlico and Laurel executives De Francis, Martin Jacobs and James Mango. Manfuso is affiliated with the Midpointe investment group through his investment in Hollywood Park and his position on the board of that California track, he said.
Hollywood Park is a major investor with the Midpointe group, Manfuso said.
"I think the commission will make its recommendation and there will, frankly, be appeals," Manfuso said.
De Francis, in a statement released by his office, said that Texas law strongly favors the operators of existing tracks. Trinity Meadows, a three-quarter oval Class II facility, is the only track operating in Texas.
McCalla acknowledged that his decision was "affected substantially by the fact that Trinity Meadows is an operating racetrack." He said the track is successful and operates with very little debt.
Noting that the hearing examiner was complimentary of the Lone Star group, De Francis said, "We are very hopeful the Texas Racing Commission will agree with that conclusion when it makes the license award in early October."
McCalla said, however, that the Manfuso litigation represented a potential problem for the group.
As for Midpointe, McCalla said he was concerned about the group's attention being spread among the several tracks and businesses that the group is involved with.
The commission is scheduled to award the license in October.