AUSTIN, TX—FEBRUARY 26, 2015—Republican members of the Senate Finance Committee ripped into Texas Racing Commission Chairman Robert Schmidt on Wednesday for defying them and approving a new form a gambling last year at Texas racetracks.

The commission is likely to be targeted throughout the legislative session, with GOP lawmakers saying commissioners exceeded their authority and out-of-state gambling interests keeping a close eye on any effort that would bolster Texas' gaming industry.

As a lifeline to Texas horse racing industry last August, the Commission approved a rule change to allow historical racing, a form of betting that allows participants to wager electronically on previously run races that have been stripped of all identifying markers.

Instead of looking to help the Texas horse industry the GOP lawmakers saw the move as expanding gambling in the state, which should require a two-thirds vote of the Legislature and approval of the electorate. However, with overwhelming polls showing the Texas residents support such a move, the Legislature refuses to bring it to a vote.

The vote by the commission, which said it did nothing wrong and simply offered a new form of legal parimutuel betting, followed a letter from most of Republicans in the Senate urging the commission to back off and leave the decision up to lawmakers.

In Wednesday's hearing, Republican senators said that the slot machine-like experience unduly expands gambling. The Senate's draft budget strips funding from the commission and some senators said they supported the idea, especially if state money would be used to defend the commission's actions in court, where the racing industry is appealing a state district judge's November ruling to block historical racing.

“I was livid that a majority of senators could send a letter asking a state agency to do something, and they ignore it,” Senate Finance Committee Chairwoman Jane Nelson, R-Flower Mound, said at the hearing.

The Legislature is supposed to make the laws, she continued. “It's about an agency that has gone rogue,” she said.

Nelson, whose district sits 65 miles South of the WinStar Casino & Resort, the "world's largest casino", in Thackerville, Oklahoma failed to mention that earlier this week GOP Senator Joan Huffman (R-Houston) admitted that Locke Lord, a law firm that lobbies the Texas Legislature on behalf of mega political contributor Tilman Fertitta, helped draft the letter sent by the Senate Republican Caucus to the Texas Horse Racing Commission.

Fertitta, CEO of Landry's Inc. and owner of the Golden Nugget Hotel and Casino in Lake Charles, La., is one of the potential foes for the Texas horse industry. The billionaire is a generous campaign contributor to the Texas GOP, including many of the members of the Senate.

Fertitta told the Austin American-Statesman that he is “100 percent for gaming in Texas” — just not at racetracks. “I think it should be first class,” he said, like his casino in Lake Charles.

Schmidt, who apologized if he offended any senators, said he didn't ignore the Republicans' letter, and he thought the senators had bad information. The commission was just introducing another form of parimutuel betting to buoy the struggling horse racing business in Texas that has seen an exodus of horses and trainers to other states, he said.

“I think the horsemen are really, really desperate,” he said. “They are leaving.”

Even though the commission doesn’t receive any taxpayer dollars — its entire $7.7 million annual budget comes from licensing and fees paid by the racetracks — that money still flows through the Legislature. That means lawmakers hold all the chips and could leave the commission empty handed by the end of fiscal year 2015.

“We do not have to fund you,” said state Sen. Robert Nichols, R-Jacksonville. “We can figure out a different way to handle race tracks than this. I hope that you understand and are listening carefully to what we’re saying.”

After the hearing, Sen. Juan “Chuy” Hinojosa, D-McAllen, said he was confident that the commission would continue to get funding, “because they need it.”

But, he admitted there are powerful gambling interests that don't want to allow expanded betting at Texas tracks.