Casino backers change strategy
Gambling proponents hope odds improve with unified effort.
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
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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.