Texas Gaming Association

The Footprint of Gaming in Texas

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Gaming already reaches every corner of Texas. Texans can keep that revenue here at home.

The "Footprint" Argument

Some people have argued that Texas should limit any expansion of gambling to the existing footprint at the State's horse and dog tracks. Our perspective is that the footprint of gambling in Texas is already much broader than the state's horse and dog tracks. In fact, only a small fraction of the gaming activity in Texas today is occurring at these tracks. 

Indeed, millions of Texans played the Texas Lottery last year, or went to bingo parlors, or went to strip centers housing hundreds of eight-liner slot machines, or even gambled from the convenience of their home computers over the Internet. In addition, millions more visited casinos last year, many of them at one of the first exits across our state's borders with Oklahoma, Louisiana or New Mexico. Texans are already gambling to the tune of more than $10 billion per year. That is a fact.  

Where are Texans Gambling?  

Regulated Gaming in Texas  

Texas Lottery - Instant ticket games sales at approximately 16,000 locations totaled $2.78 billion, and online lottery games such as Mega Millions and Lotto Texas added an additional $877 million in sales in 2010. After prizes and expenses, the lottery deposited $996.5 million into the State's coffers.¹  

Charitable Bingo - In 2009, 1,255 licensed conductors of charitable bingo generated $692.9 million in gross receipts at 416 facilities. Approximately 74% of this amount or $514.3 million was paid out in prizes leaving $178.6 million. $35.9 million, roughly 20% of the net balance, was distributed to charities, and $13.5 million was allocated to the state. The remaining $124.5 million went to expenses and profit for the bingo facility operators.²  

Pari-mutuel Wagering - $502.3 million was wagered at the state's active horse and greyhound race tracks in 2010. Of this amount, $42.06 million was wagered on live racing at that track, with the remaining wagers consisting of simulcast and export wagers.³ Just under $21 million in revenue was deposited to the Texas Racing Commission Account.⁴   

 

Unregulated Gaming in Texas  

Eight Liners - It is estimated that Texas has anywhere from 30,000 to as many as 150,000 illegal eight-liner machines located in strip centers and various other venues located in virtually every corner of the state. These machines work just like slots, but they are unregulated and untaxed. Criminal penalties for the possession of eight-liners are relatively low, so their owners operate, as a practical matter, without regard for the law. The best estimate is that Texans lose $1.9 billion in these machines each year.⁵  

Internet Gaming - Internet gaming has grown exponentially over the past few years even though it is not currently legal in the United States. The best estimates are that between 3 and 15 million Americans play poker online for money each year.⁶ Industry experts estimate that online gambling sites generated $5.4 billion in revenue from Americans in 2009, with several hundred million coming from Texans.⁷ Texas receives no benefit in tax collections or economic impact from these expenditures.  

Sports Betting - Wagering on the outcome of professional and collegiate sports is illegal in every state except for Nevada, where $2.57 billion in legal wagers generated $136.4 million in revenue for sports books in the state.⁸ It is estimated that legal sports books make up only 1% to 4% of all sports wagering in the United States. Illegal wagering on sports in Texas is likely upwards of $1 billion each year. Again, this activity is unregulated and untaxed.  

Casino Gaming Casinos - Various economic analyses estimate that Texans wagered approximately $4 billion in out-of-state casinos in 2010, much of it in the casinos located immediately across the Texas border in Louisiana, Oklahoma, and New Mexico. The revenues, jobs, and broader economic impact of these expenditures all went to schools, highways and other public needs of the residents of these adjoining states.⁹  

Additionally, the Kickapoo Traditional Tribe of Texas operates the Kickapoo Lucky Eagle Casino in Eagle Pass, Texas, a legal Class II gaming facility. The 15,000 square foot casino is open 24 hours a day and houses 1,800 slot machines, 20 table games, over a dozen poker tables, and 450 seats for bingo.1011 The state of Texas does not tax or share in any of the gaming revenue generated by this casino.  

Let the Voters Decide  

The Texas Gaming Association supports letting the voters decide whether to authorize a limited number of destination resort casinos, along with slots at the tracks, all awarded on a competitive bid basis. Study after study has shown that destination resorts with world-class entertainment, shopping, restaurants and hotel rooms generate much greater economic impact for a state than any other gaming options. They create the most jobs. And they also help keep Texas dollars at home and put an end to the type of unregulated, untaxed gambling that is happening here today. 

Our Plan  

• Authorize a limited number of destination resort casinos. Places a constitutional amendment before Texas voters that would authorize up to eight destination resort casinos, and an additional eight licenses for slots at Texas tracks. 
• Dedicate the gaming tax revenues to the Property Tax Relief Fund. Dedication of these revenues will help to ensure that the legislature keeps the promise of lower school property tax rates.  
• Fund the TEXAS Grant College Scholarship Program. Dedicates other tax streams generated directly from these gaming facilities to fund college scholarships through the TEXAS Grant Program. 
• Allow each of the three recognized Indian tribes in Texas to operate a gaming facility on their tribal lands in accordance with state and federal law.  

Our Goals  

• Let the voters decide. Our democratic system trusts the voters to elect legislators to serve in Austin who will enact their will. Poll after poll shows that as many as 85% of our state's voters want to vote on the expansion of gaming. We should trust them to make the right choice.  
• Provide at least a billion dollars in state revenue for the upcoming biennium to help the state balance its budget. This would be mostly in the form of up-front fees from the companies winning the licenses to operate facilities. 
• Don't feed the beast. Spend the revenues that are generated in a way that does not grow government, but instead lowers taxes and helps Texas remain competitive.  
• Create tens of thousands of direct jobs in the new gaming facilities. These are good jobs, with career paths, high salaries and benefits. And, they won't cost the state one penny in incentives.  
• Require competition for the gaming licenses. Competition, not entitlement, is what will generate the greatest economic impact and benefit for the public. No one is automatically entitled to anything under this proposal.  
• Keep Texas dollars in Texas. World-class destination resort facilities will not only bring Texas gaming dollars back from adjoining states, but will significantly increase the flow of convention and tourism dollars into Texas. 

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