Texas Online Sports Betting

Status of sports betting in the lone star state

Texas. The largest state in the continental U.S. by land mass and second in population. It’s home to roughly 30 million Americans and houses five of the the fifteen largest cities in the country. Along with California, Texas is one of the crown jewels of regulated iGaming in the U.S.

Sports betting progress in Texas would send shockwaves throughout the industry. For perspective, it would provide legal betting access in one fell swoop to more people than the two largest states that currently have regulated markets, Pennsylvania and Illinois, combined.

Could it happen? Despite having some of the nation’s most restrictive gaming laws, it’s not as far fetched as once believed. The state is packed full of sports fanatics, has a rich gambling history, and has already introduced a bill that could see it through. Let’s take a look at the current climate for sports betting in the Lone Star State.

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Current Texas online sports betting progress

There are some rumblings coming from deep in the heart of Texas. In 2019, Democratic Rep. Eddie Lucio III introduced a bill through the Texas House. HB 1275 sought to afford all Texans (and visitors) the opportunity to bet on both pro and college teams. It proposed the regulation of both retail wagering, and online sports betting via websites and mobile apps. It referenced just five potential sports betting permits, and notably nixed the possibility of betting on amateur sports (High School athletics are no joke in Texas).

While it didn’t move forward due to Republican opposition, HB 1275 is actually still alive. It’s currently in a state of limbo, having been denied advancement without being killed completely. It remains a possibility that should the political climate improve, it wouldn’t be difficult to modify and implement.

So what sort of circumstances could change the equation? Enter: COVID-19. The global pandemic has done a number on economies throughout the world, and the state of Texas will be looking for extra cash. While Republicans currently hold a majority in the Texas House of Representatives, its worth mentioning that sports betting legislation isn’t always a partisan issue. It has been estimated that a legal industry could provide thousands of jobs, and more than a billion in revenue every year – numbers that can appeal to both sides of the aisle.

About HB 1275

The current bill for Texas sports betting, HB 1275, could certainly help replenish the state’s coffers. Not only does it propose a licensing fee of $250K, but it also calls for a 6.25% tax on every wager.

It’s worth noting that the proposed $250K figure is actually quite cheap as far as licensing fees in the U.S. are concerned. By comparison, Pennsylvania currently has a vibrant, growing online betting market despite charging $10 million per license. Should HB 1275 get another look, it wouldn’t be a surprise to see the fee increase substantially.

While it hasn’t been a part of the current Texas sports betting discussion, permitting sports venues like “Jerryworld” (AT&T Stadium) to house retail sports betting facilities, like Illinois has done, may be a possibility as well.

While billions in estimated income may be a bit ambitious, there’s no question that the regulation of sports betting would add significant revenue for Texas during a time when every dollar can make a difference.

What needs to happen for Texas to legalize sports betting

Any sports betting bill will need to receive a majority vote in the Texas House of Representatives. Republicans currently hold an 83-67 (55%) majority, and have largely opposed the idea to this point in time. In addition, the Governor of Texas, Greg Abbott, is a known gambling opponent and is not expected to provide support.

Should the House manage to accumulate a majority vote and advance with a bill, it would be on Governor Abbott to decide to whether to sign it into law, let it sit for 10-days and become a law without his signature, or to exercise his veto power.

It’s worth noting that a two-thirds majority in both chambers of the Texas government can overrule the Gubernatorial veto, therefore Greg Abbott would not be able to stand in the way of overwhelming support. Without two-thirds support though, Abbott will hold the cards until his term ends in 2023.

Texas Online Sportsbooks

If Texas is successful in its quest for online sports betting, prominent bookmakers will line up for a chance to gain a foothold in the market. Both DraftKings and FanDuel, the unquestioned leaders in DFS, already offer lucrative contests throughout the state and could easily expand their operations to cover Texas sports betting pending regulatory approval. They’ve been frontrunners thus far in every state that has legalized betting, thus it would be safe to assume TX would be no different.

In addition, based purely on its enormous population and regard for sports, Texas would be the apple of the eye for all leading iGaming operators. All of the following online sportsbooks would be clamoring to join in, including:

MGM and ROAR Digital has recently committed more than $400 million in support to back its premier online sports betting brand, BetMGM. It would be hard to imagine MGM sitting out in Texas.

Likewise, sites like FOX Bet, BetRivers, PointsBet, and the recently launched Barstool Sportsbook (Penn National) would surely be interested in tossing their cowboy hats in to the ring, having already achieved a great deal in other jurisdictions throughout the U.S. Penn National in particular already operates two Class 1 horse tracks in Texas, in addition to a Greyhound track.

Finally, established European bookmakers like William Hill, Unibet, and Bet365 that have attained worldwide notoriety in sports betting over a number of decades will surely be a factor.

As the market continues to develop we will provide updates.

Gambling in Texas: what is, and isn’t legal

For being a state that prides itself on awarding its residents a little more freedom, its gambling laws are excessively harsh. Here’s a breakdown of what you currently can, and can’t do.

Not permitted in Texas

In Texas it is illegal to bet on anything that is based in any way on chance. If it’s not entirely a game of skill, it’s not allowed.

  • Casino gaming – All forms of casino games are expressly prohibited via state law. This includes table games and slots. Blackjack, roulette, craps, etc. It’s all off limits.
  • Poker – You may be thinking, “But poker is a game of skill, not chance!” While true, the state of Texas hasn’t reached this conclusion yet. There are still elements of the game that involve chance… thus poker still falls under the gambling label.
  • Sports betting – All forms of sports betting are illegal by current Texas law. This includes Texas online sports betting, and retail wagering.
  • Bingo – Bingo is a popular activity throughout the country, however, since it relies on chance – it’s a no-go… unless the proceeds are headed to charity.
  • Raffles – Unauthorized raffles can be charged as a Class A misdemeanor. There are a few circumstances in which they are permitted, but in general, if its for-profit, its out.

Legal forms of gambling in Texas

As it currently exists, the state isn’t a total loss for gambling. There are a few activities you can get into.

  • Horse racing – Betting on horse races is allowed in the state at specifically licensed locations. This includes races that are simulcast, and pari-mutual wagering.
  • Dog racing – Same activity, same general process, different animal.
  • Lottery – Introduced by a House Bill in 1991, the Texas Lottery operates statewide and is controlled by the Texas Lottery Commission.

Texas Tribal Casinos

There are three federally recognized tribes within the state of Texas, each of which operates a gaming facility in the state. If you’re looking for casino-style gambling in TX, these three spots are your best bet. Below is a complete list of the current, legal gambling sites in Texas – including both the tribal casinos and state sanctioned racetracks.

Casino / TrackTypeLocationOwner / OperatorBrand Association
Kickapoo Lucky Eagle CasinoTribal CasinoEagle Pass, TXKickapoo Traditional Tribe of TexasTBA
Naskila GamingTribal CasinoLivingston, TXAlabama-Coushatta TribeTBA
Speaking Rock Entertainment CenterTribal CasinoEl Paso, TXYselta del Sur PuebloTBA
Lone Star ParkClass 1 Horse TrackGrand Prairie, TXGlobal Gaming SolutionsTBA
Retama ParkClass 1 Horse TrackSelma, TXPenn National Gaming TBA
Sam Houston Race ParkClass 1 Horse TrackHouston, TXPenn National GamingBarstool Sportsbook (est.)
Gulf Coast RacingGreyhound TrackCorpus Christi, TXGulf Coast Racing LLCTBA
Valley Race ParkGreyhound TrackHarlingen, TXPenn National GamingTBA

In Texas, sports are king

Texas is home to one of the nation’s most vibrant sports cultures. From amateur athletics up to the pros, there’s passion and love for every game, every sport, at every level. Pro sports teams already competing in the state include:

  • Dallas Cowboys (NFL)
  • Dalls Mavericks (NBA)
  • Dallas Stars (NHL)
  • FC Dallas (MLS)
  • Texas Rangers (MLB)
  • Houston Texans (NFL)
  • Houston Rockets (NBA)
  • Houston Astros (MLB)
  • Houston Dynamo (MLS)
  • San Antonio Spurs (NBA)

… and that’s not all. There are more franchises either confirmed and coming soon, or rumored to be in the works. Austin, one of the nation’s fastest growing cities, seems to be next up. Austin FC will join MLS in 2021. In addition, Austin and San Antonio are often floated as a potential expansion site for the NFL. Located just 80 miles apart, a local franchise would be able to draw from both metro areas.

NFL

After years of fighting sports betting, the NFL is now all-in. Teams throughout the league have already begun establishing lucrative partnerships with their preferred sportsbooks. For example, the Denver Broncos have joined forces with FanDuel, the Raiders and Titans have linked up with BetMGM, the Colts and Bears are with PointsBet, and the Eagles have picked DraftKings. Once legal sports betting comes to Texas, its NFL franchises will do the same.

The Dallas Cowboys and Sports Betting

The Dallas Cowboys are one of the league’s marquee franchises, and will be the most coveted in-state partnership by a wide margin. The team’s owner, Jerry Jones, is on board with the legalization of sports betting, indicating that he believes it will greatly increase the value of their TV contracts, and overall viewership numbers across the league. The team already has an official casino partner, the WinStar World Casino Resort, which is located 100 miles north of Dallas, across the Oklahoma border. Once permitted, iGaming will follow.

What’s more, Jerry Jones has already invested heavily in DraftKings through his stadium operations company, Legends Hospitality. Thus, it’s not hard to connect the dots between the Dallas Cowboys and a potentially lucrative DraftKings Sportsbook partnership.

NBA

Commissioner Adam Silver has been great for the sports betting industry. He released an op-ed piece with the New York Times in 2014, publicly backing the regulation of sports betting in the U.S. Silver saw that betting was taking place anyway, and decided it would be better for the NBA for it to be done with proper protections and safety protocols.

Now that it is legal, the league has created an inclusive environment for betting, welcoming partnership agreements. Texas online sports betting would create an excellent opportunity for its teams to take advantage of. Mark Cuban, the owner of the Dallas Mavericks, has already declared his interest in sports betting, and has invested heavily in the European sports betting tech provider Sportradar. Similarly, the Houston Rocket’s owner, Tim Fertitta, is no stranger to gambling. He also owns the Golden Nugget Casino franchise which operates numerous locations throughout the country.

MLB

Baseball has been one of the most popular sports to bet on in the United States for well over a century. So much so, that there have been numerous industry-shaking scandals. The most notable being the “Black Sox”, who were allegedly paid to throw the 1919 World Series, and of course, Pete Rose, who has been banned from the game for life due to betting on baseball while he managed the Cincinnati Reds.

Due to this checkered past, baseball was hesitant to bring betting into the light. In the early days of legal sports betting MLB commissioner Ron Manfred was not a champion for the cause. However, as it has become more mainstream in other leagues – that tune has changed. Major League Baseball now has official partnerships with both DraftKings and MGM Resorts.

Texans in particular have already shown a proclivity to wager on the games. Famously, “Mattress Mack” McIngvale has wagered millions on his hometown Astros to win during recent seasons, garnering national attention. However, since it’s not legal to bet on sports in Texas, his action is lost out of state.

College sports

While they aren’t pro teams, their support and admiration throughout the area certainly rivals them. Texas colleges are heavily invested in their collegiate athletic programs, packing tens of thousands of spectators into stadiums across the state on a weekly basis. Betting on the Longhorns, Aggies, or Red Raiders may well be on the agenda soon. Popular colleges in Texas include:

  • University of Texas
  • Texas A&M
  • University of Houston
  • Texas State
  • University of North Texas
  • Texas Christian University (TCU)
  • Baylor
  • Texas Tech

Some states, like New Jersey, have elected to restrict betting access on local college teams. Thankfully that has not been mentioned yet during the sports betting discussion in Texas. It seems likely that users will be able to place wagers on the Longhorns, Aggies, Red Raiders, and more.

Since it relies on amateur athletes, the NCAA has been very cautious with its relationship to sports betting. However, some of the walls have started to come down. The University of Colorado recently announced an official sports betting partnership with PointsBet – the first of its kind in the industry. Once the genie is out of the bottle, there’s no putting it back in. More will follow.

Youth athletics

Texas is home to some of the most prominent youth sport scenes in the country. Driving through any Dallas, Houston, or San Antonio suburb you’re like to see stadiums towering over the landscape. No, they’re not for a local pro team… Texas is home to more than fifty high school stadiums with room for more than 10,000 spectators. Even though you won’t be able to wager on amateur athletics in the state, it’s worth pointing out as a reference point. The state that gave us Friday Night Lights has bred generations of sports-obsessed viewers who would love the ability to place a bet.

Texas: The sports betting hub of the future?

Its status as a tourist destination could elevate a potential Texas sports betting industry to new heights. In addition to its near 30-million residents, more than 200 million people visit the state on a yearly basis. Whether its for a massive sporting event or an incredible festival like South by Southwest, the state has become an international destination.

Texas is also a popular host site for major sporting events. Both AT&T Stadium in Arlington, and NRG Stadium in Houston have hosted Super Bowls within the last 10 years. In addition, the NCAA Mens Basketball Final 4 has chosen Texas time and time again. The Alamodome in San Antonio seems to get the nod every 10 years (’98, ’08, ’18), while Houston hosted in 2011 and 2017, with Dallas doing the honors in 2014.

By attracting these marquee contests, not only are millions of people flocking to the state to take part – its millions of sports-loving people. Having access to in-person and online sports betting during these contests would enrich the experience even further, cementing the state as a true destination for both events, and sports betting.

Furthermore, Texas has the rare opportunity to gain first mover status within its region. It’s border states, Louisiana, Arkansas, Oklahoma, and New Mexico, have yet to jump on the sports betting wagon. A regulated online market would make Texas a true hub for interstate betting traffic.

A history of gambling in Texas

From the Wild West to the common era, Texas has a long history with gambling that predates its statehood. Throughout the 1800’s gambling was an incredibly popular leisure activity in the region, extending in to Mexico with halls popping up across the frontier, and in major cities.

Gambling reached its peak in the post Civil War era. Legendary figures like Bat Masterson, Doc Holliday, and Wyatt Earp embodied the quintessential lawless, Old West persona, plying their gambling and gunfighting skills throughout the Lone Star State. They defined what it meant to be a professional gambler.

Prohibition and restriction

Despite a past that embraced these vice activities, the tone began to change in Texas during the first part of the 20th century. A far more restrictive approach to gambling regulation began to take hold during the build up to prohibition. Just after the turn of the century the state axed most forms of gambling, including horse racing, and began tackling alcohol and other substances like marijuana. In 1919 the Eighteenth Amendment of the U.S. Constitution was passed, banning the sale of alcohol throughout the country. Prohibition marked the official end of Texas’ Old West attitudes towards gambling.

Even during its most restrictive years, gambling continued. Most major cities maintained red-light districts where inclined persons could find a game of chance. If it wasn’t already obvious from the name, Texas was the birthplace of Texas Hold’em, the Cadillac of poker. The most popular poker variant in the world today grew out of Robstown, Texas in the early 1900s – before spreading around the world. Ironically, it remains illegal in its origin-state.

Parimutuel betting for horse racing was legalized first in 1933 in hopes of boosting the post-depression economy, but, alas, the industry lasted just four years before the governor shut it down again.

Progress and scandal

Fifty years later, following more than two decades of efforts, parimutuel betting on horses and greyhounds was reinstated in 1987 through a voter referendum. The industry is controlled by the Texas Racing Commission. There are three official Class 1 horse tracks operating now in the state, one near each major city: Houston, Dallas, and San Antonio. Class 2 and 3 licenses are also available. Greyhound racing is also an option in Corpus Christi, Harlingen, and La Marque.

A few years later the state OK’d simulcast betting in 1991, so you don’t have to be physically present at a licensed track to place a bet.

In 1987, Southern Methodist University in Dallas became the first (and only) Division I program to date to suffer the “death penalty”. After repeat violations for bribing players, the football program was put to bed for the ’87 season in hopes of achieving a full cleans. Subsequently the ’88 season was also lost due to player transfers, and it took decades for the school to rebuild the program and reputation. This scandal, while not directly related to sports betting, still looms large in the state and its perception of amateur athletics.

In 1991 the Texas Lottery was born, bringing scratch-off cards and even multi-state games like the Mega Millions to TX. Both non-profit bingo and raffles remain popular as well.

Modern era

Throughout the 80’s and 90’s, the federally recognized tribes within Texas lobbied heavily for the right to offer gambling, and the Indian Gaming Regulatory Act gave them a way in. Bingo was the first offering, but the tribes eventually expanded their catalogs to include slots, poker, and certain table game options – tapping in to a gray area in the state’s legislation. In the years since, the tribal gaming facilities have been involved in near constant legal battles with the state – but they’re still up and running.

Around the same time as the Tribal casinos, casino cruises started gaining popularity in port cities. Boats would board in Texas, and sail out to international waters to offer casino games. Success and popularity has been hot and cold, with most failing to string together sustained periods of operation. The final boat, the Jacks or Better Casino, ceased operations in 2018.

PASPA

Sports betting legislation in the U.S. received a much needed boost in May 2018 when the Supreme Court decisively struck down the Professional and Amateur Sports Protection Act (1992). PASPA had been the primary hurtle for sports betting progress in the U.S. during its 26-year existence, however, a persistent challenge from New Jersey eventually took it down. Without it standing in the way, all states are now free to establish their own sports betting laws and practices. Many have already done so, and Texas may follow.

While general betting options remain limited, the appetite for gambling and Texas sports betting has never been higher. We’ll keep our fingers crossed for future progress.

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