Casino back­ers change strat­egy

Gam­bling pro­po­nents hope odds im­prove with uni­fied ef­fort.

Austin American-Statesman - - FRONT PAGE - ByTim Ea­ton teaton@states­

The odds al­ways ap­pear long for pass­ing bills to ex­pand gam­bling in Texas, but ev­ery two years, un­re­lent­ing pro­po­nents hope for a lucky break.

For the leg­isla­tive ses­sion that will be­gin in a cou­ple of weeks, var­i­ous gam­bling pushers will be re­turn­ing with more unity than they have seen in a long time.

But even if the groups — which have been at odds in the past — share a vi­sion for casi­nos in Texas, they could face a daunt­ing task in 2013, es­pe­cially since pass­ing a gam­bling bill would take the sup­port of two-thirds of both cham­bers and vot­ers’ ap­proval in a statewide ref­er­en­dum.

Bill Miller, an Austin po­lit­i­cal con­sul­tant and lob­by­ist, said gam­bling is al­ways a tough sell for pro­po­nents, but this time around, a high level


this report is one in a se­ries of sto­ries pre­view­ing im­por­tant state is­sues be­fore the 83rd leg­is­la­ture, which will con­vene Jan. 8.

of co­he­sive­ness could be a game changer. That’s be­cause the fac­tions won’t be work­ing to kill one an­other’s mea­sures.

“They dra­mat­i­cally in­crease their chances,” Miller said.

Still, pro-gam­bling or­ga­ni­za­tions can ex­pect op­po­si­tion.

Michael Quinn Sul­li­van, pres­i­dent of Tex­ans for Fis­cal Re­spon­si­bil­ity, which ad­vo­cates spend­ing re­straint, said he and many con­ser­va­tive law­mak­ers will op­pose gam­bling.

First, a lot of con­ser­va­tives don’t buy pro­po­nents’ ar­gu­ment that Tex­ans’ money is go­ing out of state and ben­e­fit­ing other economies, Sul­li­van said. Just look at Louisiana and Las Ve­gas; they each have strug­gling economies, he said. Height­ened ex­penses for so­cial ser­vices, greater law en­force­ment needs and more reg­u­la­tion all rep­re­sent high costs that come with ex­panded gam­bling, Sul­li­van said.

Also, Sul­li­van, whose group is an in­flu­en­tial force in the Leg­is­la­ture, said he op­poses ex­panded gam­bling be­cause it has the po­ten­tial to breed new lev­els of crony­ism. Only po­lit­i­cally con­nected peo­ple would get li­censes to op­er­ate casi­nos, Sul­li­van said.

“That’s not free mar­ket cap­i­tal­ism,” he said.

To make things even harder, so­cial con­ser­va­tives and Chris­tian groups are al­ways ready to fight gam­bling be­cause they see it as im­moral.

But even with long odds and plenty of op­po­si­tion, gam­bling pro­po­nents are head­ing into the 83rd leg­isla­tive ses­sion with a cer­tain de­gree of op­ti­mism.

John Mont­ford — a former state se­na­tor and the front man for Let Tex­ans De­cide — said his or­ga­ni­za­tion has seen in­creased in­ter­est in let­ting vot­ers de­cide whether gam­bling should be ex­panded in Texas be­yond the state-run lot­tery, horse rac­ing and dog rac­ing.

“Texas is open­ing up a lit­tle bit,” Mont­ford said.

Since June, Mont­ford has been trav­el­ing around the state and talk­ing to vot­ers on be­half of his group, which is made up in­ter­ests that wanted slot machines at race­tracks last ses­sion. He said most of them rec­og­nize that a lot of Tex­ans are go­ing to gam­ble, and when they do, many of them will take their money to le­gal casi­nos in neigh­bor­ing states, such as Ok­la­homa and Louisiana.

“We’re hem­or­rhag­ing money to other states,” Mont­ford said. “Why not reg­u­late it, sanc­tion it and put some money in the trea­sury?”

This time, Mont­ford’s group is not ask­ing for slots. It is ad­vo­cat­ing casino gam­bling.

Mont­ford said his group would have been happy with ex­panded gam­bling only at race­tracks. But his group — which is backed by Sam Hous­ton Race Park in Hous­ton and Penn Na­tional Gam­ing, which op­er­ates casi­nos and race­tracks — re­al­ized it needed to be more in­clu­sive and ac­cept the idea of ex­panded gam­bling at the state’s In­dian reser­va­tions and an op­tion of hav­ing Las Ve­gas-style re­sort casi­nos.

“I think we’re be­ing pretty open-minded,” he said.

Last ses­sion, the or­ga­ni­za­tions be­hind Mont­ford’s group were of­ten at odds with the Texas Gam­ing As­so­ci­a­tion, a pro-gam­bling or­ga­ni­za­tion backed largely by the Las Ve­gas Sands Corp. The as­so­ci­a­tion, which wanted re­sort-style casi­nos on the coast and in ma­jor metro ar­eas, has yet to ap­pear on the Capi­tol scene, but it could or­ga­nize again.

Also last ses­sion, other casino in­ter­ests were rep­re­sented at the Capi­tol, but they were not part of the Texas Gam­ing As­so­ci­a­tion. Those big Ne­vada casi­nos — such as Wynn Re­sorts, MGM Grand, Cae­sars and oth­ers — are still on the scene and are rep­re­sented by some pow­er­ful lob­by­ists.

Though the Las Ve­gas casi­nos have not for­mally or­ga­nized, most of their in­ter­ests seem to be aligned, said John Pitts, a lob­by­ist rep­re­sent­ing Wynn.

“The gam­ing in­dus­try ap­pears to be more united than in past ses­sions,” Pitts said.

Many Capi­tol ob­servers saw the 2011 leg­isla­tive ses­sion — with its multi­bil­lion-dol­lar bud­get short­fall — as the best op­por­tu­nity in years to pass a bill to ex­pand gam­bling. Pro­po­nents said ex­panded gam­bling rev­enue could help plug the gap­ing bud­get short­fall. But a lack of con­sen­sus among gam­bling groups hurt their ef­forts to ad­vance leg­is­la­tion, and no gam­bling bills ever made it to the floor of ei­ther cham­ber for de­bate.

For the 2013 ses­sion, pro­po­nents face a new chal­lenge since it ap­pears that the state will have a sur­plus of cash. The ex­tra money in state cof­fers, largely due to in­creased oil and gas op­er­a­tions, takes away one of the pro­po­nents’ fa­vored sell­ing points: be­ing able to of­fer needed tax rev­enue.

Miller, a found­ing part­ner in Hil­lCo Part­ners LLC, a lob­by­ing firm that has never had any gam­bling clients, said he ex­pects gam­bling in­ter­ests to present their case in earnest dur­ing the reg­u­lar ses­sion, but he said they also have their eye on the fu­ture.

The gam­bling pro­po­nents have “read the tea leaves” and know that a court could or­der the state to pro­vide more money for pub­lic ed­u­ca­tion. And if the state is in search of new rev­enue, gam­bling in­ter­ests could be in a good po­si­tion to pass a bill, Miller said.

“It’s an op­por­tu­nity,” he said. “A golden one, ac­tu­ally.”

Pitts said his clients re­main ready for any­thing.

“We are stand­ing by to be ready when the Leg­is­la­ture feels that it will need ad­di­tional money,” Pitts said.

In­dian tribes, such as the Alabama-Coushatta Tribe of Texas, also could be in the mix. Tribe lead­ers could not be reached, but in the past, the tribe has asked for per­mis­sion to run casi­nos.

There are also ef­forts to al­low lo­cal gov­ern­ments to de­cide whether they will al­low now-il­le­gal eight-lin­ers to op­er­ate within the law.

And state Rep. Ed­die Rodriguez, D-Austin, has of­fered a new twist in the gam­bling de­bate. He has in­tro­duced leg­is­la­tion to al­low for poker at race­tracks, In­dian reser­va­tions and bingo halls. Un­like other gam­bling mea­sures, he said, his idea would not need a con­sti­tu­tional amend­ment, with its re­quire­ment of a su­per­ma­jor­ity vote in the House and Se­nate and the elec­torate’s bless­ing.

Although the con­sti­tu­tion gen­er­ally pro­hibits gam­bling, poker is a game of skill, Rodriguez said.

In pre­vi­ous ses­sions, Democrats largely fa­vored gam­bling in­ter­ests, and many Repub­li­cans have been op­posed to them. Gov. Rick Perry has said he is op­posed to ex­pand­ing the gam­bling foot­print in Texas.

House Speaker Joe Straus, a San An­to­nio Repub­li­can, has rel­a­tives who have in­vested in San An­to­nio’s Re­tama Park race­track and has said he would re­cuse him­self in any gam­bling de­bate.

Rep. Ed­die Rodriguez would al­low poker in cer­tain lo­ca­tions.

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