87th LegislatureIssuesState HouseTaxes & SpendingTexas House Committee ‘Seriously Contemplating’ Legalizing Commercial Casinos and Sports Betting

Rep. Dan Huberty (R-Houston) presented his bill, House Bill (HB) 2070, which would set up a sports wagering licensing program in Texas. His arguments centered on the economic benefits and his contention that there is already a prevalent black market for sports betting.

“I’m not asking for anything that’s not already happening right now,” Huberty said.

Decrying the “billions flowing out of state” because of Texas’ sports wagering ban, Huberty projected there would be $180 million in tax revenue after the first year of legalization and $400 million in subsequent years. 

The state representative pointed to Murphy v. National Collegiate Athletic Association, a 2018 decision by the U.S. Supreme Court that overturned a federal law banning sports betting legalization at the state level. 

Huberty noted that a myriad of states have legalized sports betting since then, including Arizona, whose governor signed sports betting legalization into law on Thursday.

Opponents of gambling cite the possible social consequences, such as gambling addictions. Rep. Matt Shaheen (R-Plano) raised the concern of members of the public gambling away their income and becoming dependent on the state government to provide for them.

Huberty argued the social consequences of gambling already exist, and said the state might as well regulate the activity and take advantage of the tax benefits.

“I think we need a legal framework to protect our citizens who are doing this,” he remarked.

‘One of the Largest Sports Betting Markets in the Nation’

Stipulating that operating a sports wagering center in Texas would be a “privilege and not a right,” HB 2070 contains a schedule of fees that a potential operator would have to pay that includes $500,000 for an interactive sports wagering permit, $50,000 for a retail permit, and $25,000 for a service provider permit.

Tad Brown, CEO of the Houston Rockets, and Neil Leibman, chief operating officer of the Texas Rangers, both testified virtually to support sports wagering legislation.

“Texas could soon become one of the largest sports betting markets in the nation,” Leibman said, touting the promised economic benefits of legal sports betting.

Jennifer Hughes — a representative of the Kickapoo Traditional Tribe of Texas (KTTT), one of only three federally recognized Indian tribes in the Lone Star State — testified against the current version of HB 2070 because it lacks the language that would allow the tribe to expand gambling as well.

“Collectively, this is a big expansion of gambling, and while the tribe is not opposed to such a policy decision by the state, the tribe, which operates a gaming facility on its reservation to provide services to its members, should not be left out of this legislation,” Hughes said.

Hughes referenced the Indian Gaming Regulatory Act of 1988 and said that proceeds from the tribe’s single gambling center on its reservation near Eagles Pass provided needed economic value to the tribe. She also testified that 90 percent of the employees at the KTTT are not members of the tribe.

A representative of the Baptist General Convention of Texas, Rob Kohler, appeared to oppose the gambling bills.

Kohler’s primary contention was that the state would not reap the projected economic benefits, though he also said on the subject of sports betting that it “attacks sports” and “sends a bad message to the youth of this state.”

Huberty laughed off religious objections, remarking, “When I’ve played golf […] I’ve gambled with people that are Baptists, they say ‘we’re against gambling and everything else that goes with it,’ [then] they gotta pay me at the 19th hole.”

‘It’s Probably Gonna Lose’

HB 2070 is contingent on the passage of House Joint Resolution (HJR) 97, a constitutional amendment that would ask voters whether to allow the legislature to “authorize and regulate the placing of wagers on sporting events as defined by law.”

Huberty asserted that the decision should be left up to the electorate.

“I think we all believe in our Texans and our constituents, and their right to be able to make a decision to vote like they all voted for us,” he said.

Gary Zimmerman, who identified himself as a former WinStar employee who worked as a paramedic during the aftermath of the Oklahoma City bombing, testified against all three gambling bills. 

“If it does get passed, I can tell you I’ll be voting ‘no’ in November,” Zimmerman said.

“My concern with this is while I like things to go to the voters and let us decide sometimes, it takes money to hold a vote, and do we really want to use taxpayer dollars to hold a vote when the odds are it’s probably gonna lose.”

‘A Race to the Top’

Rep. Charlie Geren (R-Fort Worth) laid out HJR 133, a joint resolution to place casinos on the ballot. Geren presented the proposal on behalf of its author, Rep. John Kuempel (R-Seguin), who was unable to attend the hearing.

Andy Abboud, the senior vice president of government relations for Las Vegas Sands Corp., testified in favor of HJR 133. Abboud jokingly said Sands has retained a “small number of lobbyists” to advocate for legalized casinos as part of destination resorts. The corporation has hired 73 lobbyists to advance casino gambling.

Abboud testified Sands is seeking a mutually beneficial relationship with Texas and wants lawmakers to become “comfortable” with the prospect of gambling laws.

“This should not be a race to the bottom, it should be a race to the top,” Abboud said, commenting that he believes there is “tremendous” opportunity in the state.

In his questioning of Abboud, Rep. Richard Peña Raymond (D-Laredo), said he believes the reason the committee is “seriously contemplating” the gambling legislation is that the concept has grown in popularity due to gaming centers such as the Kickapoo Lucky Eagle Casino and Naskila Gaming in Livingston, which belongs to the Alabama-Coushatta Tribe of Texas.

“If we hadn’t had these Indian reservations that have been doing this and exposing people to something that obviously people like, I doubt that the support would have grown as much as it has grown,” Raymond said.

Discussing the poverty of the KTTT prior to their opening a casino, Raymond said to Abboud, “I know it’s not your job to look out for the Kickapoos where I come from […] I appreciate that you’re trying to work with us. You gotta understand there are gonna be some of us that are gonna help the little guy, and that’s about as little a guy as you get.”