Texas Sports Betting Update: Gaming, Casino Legislation Tantalizes Despite Political Difficulties

Texas, the second-most populated state and the largest “untapped” casino market, is once again considering gaming legislation after decades of largely fruitless efforts.

Many of the entrenched political obstacles remain to thwart what would be the nation’s most sought-after casino, sports betting and iGaming market, but stakeholders still see breakthrough potential during this year’s legislative session.

Republicans Warming Toward Sports Betting

Texas political observers believe some top Republican officials in the GOP-dominated state could be warming to the first significant gaming expansion since the lottery was approved in the early 1990’s.

Phil Cox, a Republican powerbroker and confidant of Texas Gov. Greg Abbott, said during a gaming industry event last year that the governor was warming to the idea of legal sports betting. Abbott dismissed expanded gaming after first taking office in 2015, but recent reports from the Texas Tribune and the Dallas Morning News reaffirm the governor is at least open to legal wagering.

Abbott’s support would give fellow Republicans political cover and initiative to back sports betting. Democrats, which are the minority party in both chambers of the legislature, have been more inclined to back legal wagering and would likely give bipartisan support to any legislation.

That doesn’t mean Republicans are fully on board. Cox and other GOP insiders believe Lt. Gov. Dan Patrick, who has become a fixture of right-leaning media outlets for his staunchly conservative political positions, seems unlikely to support any gaming initiatives. Under Texas’ constitution, the lieutenant governor has unusually strong control over Senate proceedings and could virtually thwart any gaming expansion.

Patrick seemed to double down on that opposion in an interview Tuesday.  The lieutenant governor reportedly said I"t’s not even an issue that’s going to see the light of day this session," according to the Houston Chronicle. 

Gaming Proponents Form Outside the Statehouse

That hasn’t stopped growing influence from some of the nation’s leading gaming and sports stakeholders.

Las Vegas Sands, one of the world’s most valuable gaming companies, has hired several dozen lobbyists to advance a long-sought-after casino in Texas. Houston, Dallas and San Antonio are among both the most populated and fastest-growing metro areas in the country, meaning a casino license for anywhere near these municipalities would be among the most coveted in U.S. gaming history.

Despite Sands’ interest, a Morning News report published Monday indicates little political capital for the first legal commercial casino in Texas history. Texas’ budget has not been impacted as severely as other states from the COVID-19 pandemic, minimizing a possible impetus to take on what would be a politically daunting endeavor.

With a casino route to legal sportsbooks unlikely, sports betting backers have turned to the state’s most high-profile sports teams. The Morning News reports several leading sports franchises have formed an alliance that is pushing legislation that would permit retail sportsbooks at their stadiums and online sports betting options statewide.

The Dallas Cowboys, Dallas Mavericks, Dallas Stars, FC Dallas and Texas Rangers have all joined the Sports Betting Alliance, according to reports. The group announced more members will be revealed in the coming days.

The alliance could accelerate several Texas sports team owners' existing relationships with legal gaming. Current Houston Rockets owner and former Houston Texans minority owner Tillman Fertitta owns the Golden Nugget Casino company, which already takes sports bets in multiple states.

Additionally, Cowboys owner Jerry Jones has supported legal gaming and struck a partnership with Oklahoma’s WinStar World Casino, the first such deal in NFL history. Mavericks owner Mark Cuban said shortly after the Supreme Court struck down the federal sportsbook ban in 2018 that legal wagering could double franchise values and has invested in betting-focused startups.

Legislation and Next Steps

The Alliance is reportedly set to introduce its sports betting legislation in the near future, joining a growing list of gaming bills already in the statehouse.

Democratic Rep. Harold Dutton filed a sports betting bill last month that would allow betting on professional and college sports, independent of casino legislation. The bill was introduced alongside a joint resolution to put a necessary constitutional amendment ballot measure before voters.

Dutton’s sports betting-specific bills join a pair of vehicles that would legalize casinos. Democratic Rep. Joe Deshotel introduced a bill and joint resolution before the 2021 session began that would allow expanded casino gaming along the Texas Gulf Coast. On Monday, Democratic Sen. Roland Guiterrez filed an even more expansive proposal to permit as many as 12 casinos in the state.

Notably, Democrats have filed all meaningful gaming legislation this session. These proposals, none of which have yet advanced out of committee, will likely face a quick legislative death without Republican support.

The pending Sports Betting Alliance-backed bill may be the best chance yet for meaningful gaming legislation this year. The backing of Texas’ leading professional athletic franchises and owners could carry considerable influence in the notoriously sports-crazy state.

That doesn’t mean any bill is a sure bet. Along with the political obstacles, any legislation faces logistical obstacles from Texas’ legislature’s session that must adjourn by May 31 and only meets regularly during odd-numbered years. Texas’ constitutional gambling prohibitions mean that voters must approve any expansion and without a passed bill in 2021, neither casinos nor sportsbooks could launch until 2025 at the earliest.

Despite these obstacles, Texas’ revenue potential keeps it firmly in the gaming industry’s eyes. The unusually active flurry of lobbying, legislation and intervention from both inside and outside the legislature have sparked hopes Texas may finally allow casinos, sportsbooks and other gaming entities increasingly common across much of the rest of the nation.

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