Legalized gambling in Texas: Why and when it could happen
Everything is bigger in Texas and so are the red numbers in the revenue column. With the economy sagging, the Lone Star State faces a budget shortfall of $27 billion over the next two years.
Cautiously following in the footsteps of other states seeking a source of additional income, Texas is entertaining the option of expanded gaming. The Legislature reconvened on Jan. 11 and if a proposal passes, gambling could be Texas’ newest version of black gold.
“Texas has attempted legislation for expanded gaming in the past but they’ve always been knocked down because of internal political fights among potential benefactors,” said Bill Eadington, Director at the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. “That said, the environment is arguably better now for legalization of gambling because states in general are in much more desperate financial straits.”
Eadington pointed out that states such as Kansas, Ohio, Maryland, Massachusetts and Pennsylvania have adopted expanded gaming in recent years to offset economic pitfalls.
Recent numbers indicate the required votes aren’t there among members of the Senate and House. The Texas Republican Party has even made a recent push to repeal the state lottery. But as Eadington noted, financial despair has swayed some of the Legislature and may attract more.
Proposals from poker halls to Vegas-style casinos will be considered over the next four months.
“The Texas Gaming Association (TGA) will be supporting legislation that will create a framework for a limited number of destination resort casinos here in the state of Texas,” said TGA spokesman Scott Dunaway. “Our proposal will include table games and electronic machines. Our resorts will not only have opportunities for casino gaming but we also have plans to bring world-class entertainment and dining—what you would come to expect in Las Vegas.”
Anywhere from four to eight resort casinos are outlined in the bill. Destinations are likely to include highly populated cities such as Dallas and Houston but also beachfront areas like South Padre Island or Galveston. Tax revenue projections brought in by casinos reach as high as $4.5 billion.
Reports have estimated that adding electronic gaming to state racetracks could produce as much as $1 billion in annual revenue. Track owners are making a strong push for slots because they don’t know how much longer the struggling horse racing industry can survive without additional gambling amenities.
And if Texans can’t spend their hard-earned dollar locally, they’ll travel elsewhere to get their kicks. Bordering states such as Oklahoma and Louisiana have profited from cowboys with cash-crammed Wranglers. Texans spend an estimated $6 billion per year in out-of-state gambling.
With 10 professional franchises and more than a dozen collegiate teams at the Division I level, Texas arguably holds more sports fans than any other state. But according to Dunaway, an expanded gaming option of sports wagering is “not even part of the conversation.”
The biggest obstacle standing in the way of legalized sports betting is the Professional and Amateur Sports Protection Act of 1992, which only allows lotteries or pools to four states that were grandfathered in—Nevada, Delaware, Oregon and Montana. One of the primary sponsors of the PASPA was former Senator and New York Knick, Bill Bradley. Ironic considering NBA players seem to have an affection for gambling these days.
“There is also a political reality on sports wagering. You’re going to run into major opposition from all the professional sports leagues and the NCAA,” Eadington said. “This is obviously the case at the federal level and may be the case at the state level. So Texas would have this legal challenge to put up with and also have to deal with extensive lobbying by the sports organizations.”
If expanded gaming in some form is passed by the Texas Legislature and voters, don’t expect to see card rooms ready for action by December. Dunaway admitted licensing and constructing a gambling establishment would be a considerable project with a significant timeframe.
Kansas passed a gaming law in 2007 that authorized the building of four casinos and the first one opened in December 2009. Maryland had a gambling initiative granted in 2008 and the first operation surfaced in October 2010.
“Two to three years is probably a reasonable timeframe from passing in legislation to opening the doors,” Eadington said. “Anywhere from 18 months to two years would be the quickest. There is lot of bureaucratic stuff that takes place along the way.”
Texas is attractive with a friendly neighborhood and low taxes. But unless the government jumps on the gambling rodeo that’s bucking the nation, it may lose its appeal. Whether it’s a baby-step approach or the second coming of Sin City, Texas is buying into betting. And if a right-wing state like Texas can ignore its moral objections, you have to think other states will warm to the idea of expanding their gaming.