Texas Gaming Association

Destination resort casinos are world class mega-centers that feature shopping, conference facilities, restaurants, and live entertainment in addition to casino gaming. These facilities, also referred to as integrated resort casinos, would be similar to the newer casinos being built in Las Vegas such as the Venetian, the Bellagio, Wynn, and the Palazzo.

According to the National Gaming Impact Study, destination resort casinos offer the greatest economic impact to any state considering an expansion of gaming. Destination resort casinos offer the highest capital investment, typically $1.5 - $2.0 billion per facility, and draw the majority of customers from out of state. Destination resort casinos would not only allow Texas to capture a great portion of the roughly $4 billion in gaming revenue that leaves the state each year, but to draw significant revenue from out of state tourists and convention attendees.

Ultimately it is up to the comptroller to determine how much revenue proposals for gaming will generate in state tax and fee revenues. Several studies have been done in the past, and new studies are under way right now to help her evaluate revenue prospects. What we do know is that these facilities will produce several tax streams to state and local governments: gaming taxes, business margins taxes, sales taxes, alcohol and beverage taxes, hotel/motel taxes and property taxes. And, in addition to the taxes that the facilities will pay directly, there will be significant economic impact throughout the areas where the facilities are built, generating additional tax revenues. All together, the state and local tax streams will exceed a small number of billions of dollars when the facilities are fully up and running.

Our proposal is to dedicate the gaming taxes paid by the facilities to the Property Tax Relief Fund. The state’s margins tax that was adopted in 2006 has fallen short of matching the amount of school property tax relief that was promised at that time. These gaming dollars can help the legislature keep that promise, and prevent local school tax rates from rising dramatically. We are also proposing that the other revenue streams generated directly by the facilities be dedicated to the Texas Grant Program which provides college tuition grants to qualifying Texas children. Neither of these uses will grow government, and both will help keep Texas competitive for jobs and capital investment.

A license to operate an integrated resort casino or to operate slots at the tracks is very valuable. Nobody ought to get one for free, and no one should be automatically entitled to one. Almost every other state has required competition for these licenses because that is the best way to ensure that companies will maximize their investments, create the most jobs, have the greatest economic impact and ensure that the public gets the best deal possible. Several world class companies will bid against each other for the integrated resort licenses, and they will spend from several hundred million to a few billion to ensure that they have the winning bid. Competition means that Texas will do gaming the right way, with world-class facilities, thousands of jobs and tremendous economic impact.

They will have to answer that question. We have tried to propose a plan that meets everyone’s needs. The Class I tracks are all very well-positioned to bid for a casino license if that is what they want to do. They would not automatically get a casino license, but they would be strong competitors for these licenses without a doubt. And all the tracks, including the Class 1s would be able to bid for up to eight slot licenses reserved for the tracks. There are only 13 track licenses that have been issued and five of those have never been built, so most tracks will be well-positioned to win a bid to operate slots at their facilities. The Indian tribes are entitled under federal law to operate gaming facilities to the extent such facilities are legal in the state. Our proposed legislation acknowledges that right and helps ensure that the Indians will share revenue from their operations and that there will not be a proliferations of Indian casinos beyond the three recognized tribes and the land they currently occupy.