Texas Sports Betting Discussion Delayed

House committee hearing on Wednesday morning didn't get to the sports gambling bill
Texas statehouse
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A sports betting bill on the agenda Wednesday in the Texas House State Affairs Committee wasn’t heard, but appears to be tabled until later Wednesday or next week when the committee meets again.

The legislation is dubbed the Texas Sports and Entertainment Recovery Act, and it was filed on Feb. 23. The 43-page proposal, which also has a companion in the Senate, provides the statutory framework for sports betting should voters approve amending the state constitution to allow for the gambling expansion. The proposal to amend the constitution is House Joint Resolution No. 97, along with a Senate companion.

Texas represents one of the largest untapped markets in the U.S., alongside California and Florida. The state of New York has retail sports betting upstate, and recently policymakers, along with the governor, formulated a plan to bring betting to the internet. However, industry-favorable implementation of the New York online sports betting legislation remains unclear, making the present plan controversial.

Texas is arguably the most unfriendly state to gambling in general among the aforementioned group of four, but without the major complications of a robust tribal gaming industry, Texas has a potential clear path toward legalization in the near-term.

Backers of the sports betting plan estimate nearly $40 million in state tax revenue each year off of $5.6 billion in handle, based on a 10% tax rate on operator revenue.

Las Vegas Sands, the Nevada-based casino giant, has been lobbying for casinos in the state as well.

Chances of passage?

Texas is always an uphill battle on gambling. In February, Republican Lt. Gov. Dan Patrick said that sports betting stands no chance in 2021. His comments were taken as a major setback to the efforts this year, but some are still optimistic that Republican Gov. Greg Abbott will end up supporting a proposal to legalize and regulate sports betting. Abbott hasn’t taken a formal public position on the issue.

Additionally, a Republican sponsor of the sports betting bill told Sports Handle that Patrick’s position on the issue is actually still fluid, and he could do a 180-degree turn on sports betting.

The Texas Legislature meets once every two years. Two years ago was a lifetime ago in the nascent U.S. sports betting market, as the major pro sports leagues and their respective franchises have continued to greatly warm to legal sports wagering with each passing year since the U.S. Supreme Court overturned PASPA in 2018.

In Texas, there’s a lobbying coalition consisting of the state’s top pro sports teams and the nation’s top betting brands to push for online/mobile authorization. That’s potentially a game-changer for Texas. The state already has a lottery, so it could be similar to the state of Tennessee, which doesn’t have commercial casino gambling but was able, in 2019, to pass a bill for online sports betting.

Unlike Tennessee, the Texas plan bypasses the state lottery and calls for putting sports gambling regulation in the hands of the Texas Commission on Licensing and Regulation.

It’s worth noting that the Texas Sports and Entertainment Recovery Act is bipartisan, meaning that it has a Republican and a Democrat sponsor. That’s important, as a bill pushed only by Democrats would have virtually no chance of gaining steam. Republicans probably need at least some Democratic support.

“Creating a legal, regulated structure for sports betting has bipartisan support and is good for consumers and good for Texas,” the sponsors wrote in a joint op-ed Sunday. “The proceeds from licensed sports betting operators will be taxed and we could see as much as $180 million in new revenue for the next two-year budget cycle and as the market grows could see as much as $1 billion over the next decade. The tax revenue from legalizing sports betting could go toward state programs in health care, education, property tax reform, or even updating our power grid. This revenue will have a real benefit to Texas families.”

While the pandemic might not have a major impact on some states when it comes to gambling expansion, it could be a key factor in Texas, long a feeder market to Las Vegas as well as to casinos in Louisiana and Oklahoma. Sin City has been hit hard by COVID-19, and the commercial casino gambling industry could finally be all in on making it so Texans don’t have to travel out of state to gamble. Lobbying from persons and entities located outside of Texas has long been credited with keeping Texas relatively barren when it comes to gambling. Full-fledged casino authorization in the state, which has been tried for years, appears a non-starter right now, with sports betting a more likely outcome given the wave of legalization sweeping the U.S.

The intro deadline for legislation in Texas this session was March 12, so the sports betting proposal hit the table well ahead of time. The delay Wednesday isn’t significant for the proposal.

The legislation will have some time to clear the House committee stage, with a May 10 deadline for advancement. The regular legislative session ends on May 31. The legislature will not meet again until 2023 if the bill is unsuccessful this year.

Lone Star State lawmakers meet biennially in odd-numbered years, with maximum regular sessions of 140 days.

Photo by Shutterstock

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