Expanded gambling gains momentum in the Texas Legislature. Here’s why it may still fail
The drive to expand gambling in Texas has momentum. That’s the first time that can be said since Texas voters approved the constitutional amendment allowing the return of legal wagering on horse racing in 1987 and then voted to legalize the state lottery in 1991, with both measures passing by a 2-to-1 margin.
Gov. Greg Abbott and House Speaker Dade Phelan say they are open to casino gambling, which will give a boost to legislation and proposals that will emerge during the 140-day legislative session that began in January. Sen. Carol Alvarado, D-houston and leader of the Senate Democratic Caucus, has already written a bill that would allow a constitutional amendment on casino gambling and sports betting if approved by voters.
Under Alvarado’s proposal, which is similar to what she filed in 2021, the Legislature could decide whether to legalize sports betting and whether a newly created Texas Gaming Commission could issue casino licenses for up to four upscale “destination resorts,” with minimum investments of $2 billion in the Dallas and Houston regions.
Additional legislative proposals and the details of various plans — including from Las Vegas Sands and the Sports Betting Alliance — could roll out this week, as stakeholders want to give lawmakers time to study complex ideas that could bring monumental changes to Texas’ culture and entertainment.
Expanding gambling has been a non-starter in Texas, a rich state with a diverse economy that doesn’t need gaming for additional revenue. Texas currently allows the lottery, horse and greyhound racing and bingo. Also, Texas has three tribal casinos, which are allowed to operate under federal law.
How could Texas gambling expand?
Casino gambling and sports betting are believed to have the most momentum for the current session.
The Las Vegas Sands Corp., the gaming company started by the late Republican megadonor Sheldon Adelson, is paying a large team of lobbyists and has contributed millions of dollars to elected officials in order to get the question of casino gambling before voters.
Las Vegas Sands and its associated political action committees gave $3.1 million in campaign donations last year, with at least $1.7 million of that going to Republicans. Democratic lawmakers and candidates received about $603,500. As of the first week of the 2023 session, Sands had brought on at least 63 lobbyists, more than any other company or entity. The company pledged to pay its lobbyists up to $5.9 million this year, according to data from the Texas Ethics Commission.
The sports betting lobby is also significant. Former Republican Gov. Rick Perry is a spokesman for the Sports Betting Alliance, a collective that includes prominent sportsbook operators and all of Texas’ major professional teams.
As the Legislature studies the issue, gambling remains a popular idea with Texans, who frequently take their money to casinos in Oklahoma and Louisiana. A poll released last week by the University of Houston found that 75% of adult Texans support legislation to let voters decide on legalizing casinos. The survey also identified 72% support among Republicans and 69% support among “born-again Christians.”
Legalized sports gambling has swept the nation since the Supreme Court overturned the federal ban on it in 2018. According to the American Gaming Association, sports betting is legal in 36 states, including neighboring Louisiana. Oklahoma Gov. Kevin Stitt is pushing for his state to join the list this year.
Expanding gambling remains a long shot in Texas, but as gamblers know, upsets are possible.
Here are three obstacles that proponents of expanding gambling must overcome to hit the jackpot.
Texas is flush with cash
In the past, one major argument for expansion of gambling is the tax revenue would generate. But unlike states like Oklahoma and Louisiana, Texas has a booming economy and doesn’t need to turn to gambling to boost tax revenue.
Expect casino gambling advocates to push the economic development impact that casinos would have on the state, including jobs and tourism.
The argument that the tax revenue could be used to fund things like public education or infrastructure is not as pressing this legislative session, when lawmakers will determine how to spend a near $33 billion surplus.
Stakeholders could act like crabs in a barrel
The Sands team is trying to develop a plan that’s supported by various stakeholders, including the horse racing industry. Between now and when final proposals are developed, we’ll know where casinos are being proposed.
Though Sands has not put out a final plan yet, I’m told to expect a push for operations in several parts of the state, including the Dallas area, Houston and South Texas. In order to prevent outrage or objections from cities that don’t get casinos, sponsors of any bills will probably be open to additions and amendments.
Past legislative proposals gave preference to allowing major horse race tracks to convert to full-blown casinos, which would give Grand Prairie the first location in Dallas-fort Worth because it’s home to Lone Star Park race track. That facility is in an existing entertainment district on Interstate 30 at Belt Line Road, near Six Flags Over Texas, AT&T Stadium and Globe Life Field. It’s owned by a subsidiary of the Chickasaw Nation, which also owns Winstar World Casino in Oklahoma, billed as the world’s largest casino, just an hour north of Dallas-fort Worth.
The fight over destination casino licenses will be intense and threaten the harmony around any legislative proposal.
There’s also the question of the existing gaming operations run by Native American tribes. Texas Sen. Roland Gutierrez, D-san Antonio, has filed a bill that would allow the Kickapoo tribe to move its existing operation near Eagle Pass, if more casinos are allowed within a certain distance. Even with that provision, it’s hard to imagine supporters of the Kickapoos’ gaming efforts backing other destination casinos in Texas.
Meanwhile, sports betting advocates are expected to independently push their proposal, instead of joining a broad coalition of gaming interests. Sands is expected to give a nod to sports betting in its proposal.
There are a lot of competing interests in any gambling proposal, and opponents of expanding gambling hope the greed that typically occurs in these efforts will cause expansion plans in Texas to crumble like a cookie.
Gambling expansion needs the support of Lt. Gov. Dan Patrick
Just as Abbott and Phelan have given casino gambling a boost, objections from Lt. Gov. Dan Patrick could doom the proposals.
In the past Patrick has opposed expanding gambling, and that makes proponents worried they won’t have his support this time around.
Simply put: If Patrick doesn’t support casino gambling or sports betting, it won’t happen.
Patrick and some lawmakers could be swayed by Christian conservatives who don’t want more gambling in Texas.
Though polls show the public, including religious Texas, support expanding gambling, the Christian lobby has been powerful enough to block gambling legislation.