Wanna bet? Texas Legislature to reconsider legalizing casinos and sports betting

Given the stiff headwinds to getting any expansion in gambling passed, sports betting and casino advocates may be competing against each other, rather than working in tandem.

click to enlarge Casino gambling and sports betting are again before the state Legislature in 2023. - Texas Tribune / Todd Wiseman
Texas Tribune / Todd Wiseman
Casino gambling and sports betting are again before the state Legislature in 2023.
Gambling legalization advocates in Texas are going all in again this legislative session, confident that they have built more support since their efforts came up far short in 2021.

The push is still an uphill battle, however, as Lt. Gov. Dan Patrick, who oversees the Senate, continues to pour cold water on the idea. But supporters have found promising signs elsewhere, and they have returned to the Capitol with an army of well-connected lobbyists after doling out millions of dollars in campaign contributions during the 2022 election.

There are two main camps pushing for expanded gambling in Texas — and right now, they appear to be operating on parallel tracks. The first is a continuation of a lavishly funded and high-profile effort initiated by the late Sheldon Adelson and his gaming empire Las Vegas Sands to legalize casinos, specifically high-quality “destination resorts” in the state’s largest cities. The other lane is the Texas Sports Betting Alliance, a coalition of professional sports teams in the state and betting platforms that is exclusively focused on legalizing mobile sports betting.

Gambling is largely illegal in Texas with exceptions including the lottery, horse and greyhound racing and bingo. Texas has three tribal casinos, which are allowed to operate under federal law.

The Sports Betting Alliance already made a splash in the lead-up to this session by hiring former Gov. Rick Perry as a spokesperson.

“What’s changed [since 2021], I think, is the continuing education of the general public that this is not an expansion of gambling,” Perry said in an interview, suggesting that Texans already participate in this sort of gambling in other states or illegally. “It’s going on, it’s gonna continue to go on and the state of Texas needs to regulate it and make sure that its citizens’ information is protected.”

Sports betting is legal in 36 states and Washington, D.C., according to the American Gaming Association.

Sands, meanwhile, has been touting a “long-term commitment to Texas.” It has not publicly detailed its strategy for this session, but a spokesperson for its political action committee in the state, Matt Hirsch, said that it “will continue to actively engage state and local leaders over the course of this session and remain committed to working with lawmakers to ultimately allow voters to decide on this issue.”

Both proposals did not make it far during their debut legislative session two years ago. Their bills received committee hearings in the House but never got voted out, and they did not receive hearings in the Senate.

This time, the Sands team is aiming to file its legislation sooner and with broader support, both within the gaming industry and the Legislature.

They also see firmer allies in Gov. Greg Abbott and state House Speaker Dade Phelan. Both leaders expressed openness to expanded gambling in 2021, and they have gone further in recent statements, suggesting agreement with Sands’ vision for casinos in the state. An Abbott spokesperson said in a statement last fall that “if there is a way to create a very professional entertainment option for Texans, Governor Abbott would take a look at it.”

“What I don’t want to see is to walk into every convenience store and see 15 slot machines,” Phelan said during a media briefing earlier this month as the session got underway. “I want to see destination-style casinos that are high quality and that create jobs and that improve the lifestyle of those communities.”

Phelan’s comment stood out for its use of the phrase “destination-style” — the same language used in Sands’ pitch.

Still, it remains to be seen if gaming advocates can make any headway with Patrick this session. He has been the most resistant to expanded gambling out of the “Big Three” leaders — which include him, Phelan and Abbott. In a December TV interview, he said that he did not see any “movement” on the issue.

Other opponents of more gambling are holding firm. If anything, they argue, there is less traction for expanded gambling this session because the Texas economy is in a better place than it was two years ago, brimming with a $33 billion budget surplus. Back then, increased gambling was discussed as a potential new revenue stream to deal with an anticipated deficit after the state had been hit by economic losses due to COVID-19 shutdowns.

“I’ve talked with countless House and Senate members, and gambling seems to be less attractive during a time of record prosperity and surpluses,” state Rep. Matt Shaheen, R-Plano, said in a statement. “There doesn’t seem to be an appetite to help large corporations increase their profits at the expense of countless Texans.”

Expanding gambling continues to be a popular idea with Texans. A poll released Thursday by the University of Houston found that 75% of adult Texans support legislation to let voters decide on legalizing casinos. The survey also identified 72% support among Republicans and 69% support among “born-again Christians,” which pollsters noted have “long [been] the backbone of opposition to legalized gambling.”

In November, state Sen. Carol Alvarado, D-Houston, refiled the casino bill she carried last session, though a House companion has not been filed yet. State Rep. John Kuempel, R-Seguin, “will be filing casino legislation again this session,” his chief of staff, Brittney Madden, wrote in an email.

The sports-betting bills have not been filed yet, and it’s unclear so far who will carry the bill. The House author from the 2021 session, state Rep. Dan Huberty, R-Houston, did not seek reelection.

Rival campaigns?

Given the stiff headwinds to getting any expansion in gambling passed, sports betting and casino advocates may be competing against each other, rather than working in tandem.

The Sports Betting Alliance is officially neutral on legalizing casinos, but the Sands team has welcomed collaboration, noting its proposal would additionally legalize sports betting.

Advocates for sports betting see their cause as a standalone issue that is more palatable for lawmakers. Perry said there is a “clear delineation” between what the Sports Betting Alliance is pushing for compared with legalized casinos.

“The other issues that are out there, they’ll have to stand or fall on their own,” Perry said. “I don’t think these will be tied together in any point in time.”

It is unclear if Patrick, the highest-ranking hurdle to expanded gambling, sees a similar distinction between the causes and could be more amenable to sports betting. His top political strategist, Allen Blakemore, recently signed up to lobby for the Sports Betting Alliance through the end of the year. And Patrick is close with Perry, once calling him “one of my best friends in life.”

Neither Patrick’s office nor Blakemore responded to requests for comment.

In the December TV interview, Patrick said no one had mentioned expanded gambling to him and no Republicans had filed bills on it yet. But advocates are making the case to Senate Republicans, and at least one of them, Sen. Lois Kolkhorst of Brenham, is giving thought to the sports-betting push.

“It’s true that Senator Kolkhorst is studying legislation to regulate ongoing app-based sports betting in Texas but she doesn’t comment on pending legislation,” Kolkhorst’s chief of staff, Chris Steinbach, said in a text message. “She will have more to say once a bill were to be filed.”

The influence

Meanwhile, the gaming industry is keeping a high profile at the Capitol. As of Thursday, Las Vegas Sands had 69 lobbyists registered with the Texas Ethics Commission, with the value of the contracts totaling well into the seven figures. The Sports Betting Alliance had 20 lobbyists signed up with the TEC.

The lobbyist stable continues to include heavy hitters at the Capitol, like former top advisers to governors and chiefs of staff to House speakers.

Gaming interests have also ramped up campaign donations since the last session. Sands formed a political action committee, Texas Sands PAC, that doled out at least $2.2 million in contributions to statewide officials and dozens of lawmakers from both parties during the 2022 election cycle. The PAC has been almost entirely funded by Miriam Adelson, who became the majority shareholder in Las Vegas Sands after her husband died in 2021.

Separately, Miriam Adelson was one of the top donors to Abbott’s 2022 reelection campaign, writing him a $1 million check.

One of the recipients of the Sands PAC money was state Rep. Craig Goldman, the new chair of the House Republican Caucus. The Fort Worth lawmaker recently told a local publication that he has not taken a position on casinos yet and that the campaign cash would not influence him.

Dallas Cowboys owner Jerry Jones, whose team is part of the Sports Betting Alliance, made a spate of six-figure donations late in the election, including $500,000 to Abbott and $200,000 to Patrick. Jones has long supported legalizing sports betting in Texas and he said in a radio interview earlier this month that “it’s really a thing that needs to be addressed at this time.”

Gaming interests also played a major role in funding the inauguration of Abbott and Patrick on Jan. 17. The program listed at least three gaming interests as top corporate donors: Sands; IGT, the Las Vegas-based slot-machine maker; and Landry’s, the Houston-based hospitality company whose CEO, Tilman Fertitta, chaired the inaugural committee. (Corporations cannot donate to campaigns under Texas law but can fund inaugurations.)

In addition to Fertitta, Miriam Adelson had a front-row seat onstage at the inauguration, watching from several seats away as Abbott and Patrick were sworn in for their third terms. And three days later, she sat front row at a pro-Israel conference in Austin as Abbott delivered a speech, twice lauding the Adelsons for their advocacy on Israel.

All the influence peddling is not fazing opponents of gaming, like Texas Values, the social conservative group.

“The expansion of gambling is already dead in the Texas Senate; and it would be a mistake for the Texas House to spend precious time on a policy matter that doesn’t have the votes to pass,” the group’s policy director, Jonathan Covey, said in a statement.

Rob Kohler, a lobbyist for the Texas Baptist Christian Life Commission, said he “really [doesn’t] see” any new momentum behind the cause.

“I’ve been on this issue for 20 years, and it always begins with the same kind of attempt to direct people’s attention to it,” Kohler said. “As the session plays on and the issue gets vetted, people realize it’s not in the best interest of the state.”

Disclosure: University of Houston has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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