In an effort to prop up the horse racing industry in Texas, state Rep. Charlie Geren has filed the second of what is likely to be multiple legal sports betting proposals in Texas.
Sen. Carol Alvarado in November prefiled SJR 17. Both pieces of legislation are constitutional amendments, which would require approval by a two-thirds majority of lawmakers in each chamber before getting on the ballot for all Texas voters.
Should Geren’s HJR 97 pass the legislature, it would appear on the Nov. 7 ballot with the following language:
The constitutional amendment to foster economic development and job growth, provide tax relief and funding for educational programs, and reform and support the horse racing industry by authorizing casino gaming at destination resorts, authorizing sports betting, creating the Texas Gaming Commission to regulate casino gaming and sports wagering, requiring a license to conduct casino gaming, and requiring the imposition of a gaming tax, sports wagering tax, and license application fees.
The latest proposal is designed to benefit the state’s ailing horse racing industry, which has become something of a trend across the country. In Illinois, Ohio, and Massachusetts, new laws allow for retail casinos at existing parimutuel facilities, and in California, where the tribal Proposition 26 failed, the tribes there included horse tracks as entities that could have brick-and-mortar sportsbooks.
Under Geren’s proposal in Texas, existing racing facilities would have the inside track (pun intended), as the resolution would allow for casinos and sportsbooks at existing parimutuels to move more quickly than other entities.
7 total retail casinos would be allowed
The resolution would allow for the creation of “destination resorts,” with racetracks intended as the cornerstone. Multi-use resorts that include gaming, accommodations, dining, entertainment, and other related entities would be created around the existing racetrack.
The proposal specifically calls for two locations in both the Dallas-Fort Worth and Houston metropolitan areas, and one each in the San Antonio, Corpus Christie, and McAllen metro areas. It effectively caps the number of locations by specifying where they would be. Locations must have had live racing in 2022 and have at least the same number of races scheduled for 2023.
A Fort Worth legislator says it's 'high time' to legalize sports betting in Texas https://t.co/D1bytRLzci
— WFAA (@wfaa) February 3, 2023
Geren’s proposal does not set a tax rate for sports betting, but would levy a 15% tax on adjusted gross revenue for casinos. The proposed Texas Gaming Commission would set the wagering tax rate. The resolution sets application fees on a sliding scale from $500,000 to $2.5 million, depending on the location, and those fees would allow licensees to have both a casino and sportsbook. A percentage of tax revenue would be directed toward increasing purses for live horse racing.
The proposal doesn’t directly allow for digital wagering, though it would give the newly formed gaming commission the power to allow it. The commission would have five members, all appointed by the governor.
The second-largest state, Texas is also the most populous without legal sports betting behind California. The Golden State voted down multiple legal wagering ballot initiatives in November, and it’s unlikely that wagering will become legal there for several years. Unlike in Texas, the decision in California will be driven by the state’s 100-plus tribes, which have a monopoly on gaming and run nearly 70 brick-and-mortar casinos.
Plenty being spent, but 2023 might be too soon
Stakeholders, particularly the Las Vegas Sands Corp., are heavily invested in seeing Texas legalize. To that end, the Sands Corp. has spent millions of dollars on campaign contributions and lobbying in the state in recent years and has more than 60 lobbyists in Austin this year, according to the Las Vegas Sun. The Texas legislature is only in session during odd-numbered years. The session opened Jan. 10 and runs through May 29.
In 2021, Rep. Dan Huberty sponsored a constitutional amendment that would have allowed for mobile wagering and betting at professional sports venues, but it did not gain traction. Traditionally, Gov. Greg Abbott and Lt. Gov. Dan Patrick have been openly opposed to legal gaming, though after gubernatorial challenger Beto O’Rourke voiced his support for legal gaming last year, Abbott did crack the door open. That said, it was Patrick who effectively killed wagering in the 2021 session as the presiding officer over the state Senate.
Traditionally, in states where lawmakers are not all-in on wagering, it can take multiple sessions for the issue to rise to the top and a consensus in favor to be reached. This session will be Texas’ second shot, which is still early in the game, if you consider that lawmakers in Minnesota and Missouri will be trying for a fifth time.
Neither of this year’s proposals has yet been assigned to committee.
