Texas lawmakers on Monday filed a pair of bills and joint resolutions that would allow for statewide mobile wagering with professional sports franchises as the license holders. Identical bills were filed in the House and Senate, along with joint resolutions that would put the measures, if passed, before voters in November.
The bills would allow for mobile wagering only, and approved professional sports franchises would be entitled to one digital skin, or platform, each. Texas has 12 Major League Baseball, Major League Soccer, NBA, NFL, NHL, National Women’s Soccer League, and WNBA franchises, at least four PGA Tour stops, and at least two NASCAR tracks.
The bills have the backing of the Texas Sports Betting Alliance, a consortium of every major professional sports team in the state plus Barstool Sportsbook, BetMGM, DraftKings, Fanatics, and FanDuel. The PGA Tour and Texas Motor Speedway are also listed as backers of the Alliance.
Neither bill has been assigned to committee, and they follow a bill dropped Friday that would put wagering in the hands of horse racetracks.
Lottery in charge, tax rate of 10%
The bills, HB 1942 and SB 715, would put the Texas Lottery Commission in charge of wagering, would set a 10% tax on adjusted gross revenue, would allow for 100% of promotional play to be deducted, would require the use of official league data, and would set the legal wagering age at 21.
Pro entities would pay a $500,000 application fee and $100,000 renewal after three years while operators would pay a $25,000 application fee and $10,000 renewal.
Accounts could be funded by most types of currency, including “digital, virtual, and cryptocurrency” as well as by credit and debit cards, which some states do not allow in an effort to curb problem gambling. Two percent of state revenue would be earmarked for responsible gaming programs.
Astros owner Jim Crane and Cowboys owner Jerry Jones issue statements in support of legalizing mobile sports betting in Texas, via Texas Sports Betting Alliance. pic.twitter.com/xyxgLBYCV3
— Brian T. Smith (@ChronBrianSmith) February 6, 2023
Of note in the bills is a section that would allow regulators to accept licenses for operators that have been approved in other states. From Section 2005.104(b):
The commission may accept a license, permit, or any other authorization to operate sports wagering issued by another jurisdiction that the commission specifically determines has similar permitting requirements as evidence that the applicant meets the interactive sports wagering operator requirements. The commission may accept another jurisdiction’s or an approved third party’s testing of the interactive sports wagering platform as evidence that the platform meets any requirements mandated by commission rule.
Streamlining the application process?
As sports betting has proliferated across the U.S., states in the process of legalizing have begun to look harder at those that already have and identify states with a similar culture or framework, but this language is the strongest yet in terms of reciprocity. It essentially would allow the Texas Lottery to accept an application fee from an operator and issue a temporary or provisional license based on the fact that the operator was licensed and that its tech stack was approved in a state Texas is comfortable with.
Smith: Let voters decide if Texas should legalize sports betting https://t.co/5X757kD9C3
— Brian T. Smith (@ChronBrianSmith) February 7, 2023
By doing that, operators could get to market faster, and some of the details of an application — particularly background checks — would be completed after the operator is live. This has happened in other states, including Virginia, but the language allowing that process is far more clear in the Texas bills. Background checks are often what slow down the application process, particularly with multinational companies that have key personnel overseas.
Getting paperwork signed off on or a report from an overseas law enforcement agency can take months. In reality, the major wagering platforms have already been vetted in other states or jurisdictions — in some cases, by more than 10.
Another interesting point in the bill is that unlike in states like Ohio or Louisiana, where lottery partners can have wagering kiosks at convenience stores, bars, or other locations, the Texas bills specifically prohibit kiosks in places of “public accommodation.”
The Texas Legislature went into session Jan. 10 and is set to adjourn May 29.
