87th LegislatureIssuesTaxes & SpendingTexas Lawmakers Express Conflicting Views on Casino Gambling

Texas Ethics Commission records say Las Vegas Sands, a casino gambling giant, has so far hired 60 lobbyists in Texas.
February 15, 2021
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Efforts are underway to bring casinos to the Lone Star State as an infantry of lobbyists set their sights on the state capital — and they have their work cut out for them. The titanic lobbying apparatus will meet political opposition and time constraints in a state that has nary a commercial casino.

Texas is a gambling desert. The Texas State Law Library describes the state as “one of the strictest” in terms of gambling prohibitions, and there are only two casino-like entertainment centers.

The Kickapoo Lucky Eagle Casino, which is operated by the Kickapoo Traditional Tribe of Texas (KTTT), is one of only two gambling centers in the state. The federal government confers KTTT, which has fewer than 1,000 members, the right to operate the facility via the Indian Gaming Regulatory Act of 1988 (IGRA).

Another destination, Naskila Entertainment in Livingston, has some gambling but is still not a full-blown casino. The Alabama-Coushatta (AC) Tribe of Texas, which owns the entertainment center, has battled state authorities in court to retain its ability to offer electronic bingo.

IGRA outlines general parameters for different levels of gaming, dividing them into three classes — I, II, and III. IGRA defines Class I gaming as “social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as part of, or in connection with, tribal ceremonies or celebrations.” 

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Bingo and card games that are generally legal in a particular state fall under Class II gaming in that state. Tribal gaming centers are not required to have the state’s approval to offer Class II games. 

Class III gambling encompasses any banking card games as well as slot machines that are not based on bingo. According to the American Gaming Association, Texas is one of only four states, accompanying Nebraska, Alaska, and Alabama, that forbids Class III gaming entirely.

Meanwhile, the Texas Lottery has operated since 1991 and recorded more than $6 billion in sales during its Fiscal Year 2019 for the first time since it was established.

Las Vegas Sands is one company making a push for more casino gambling in Texas. Those efforts were spurred by the late Sheldon Adelson, who was the company’s chairman and CEO when he died last month. Adelson’s successor, Rob Goldstein, indicated in an earnings call last month that the company still has its heart set on Texas.

“You can’t deny the power of Texas, the size and scale. And I was there last week, and it was a fascinating couple of days,” Goldstein said, according to a transcription of the call. “And again, we’re having conversations. We’re looking, kicking the tires and we’ll advise you when something emerges from Texas.”

According to Texas Ethics Commission records, Las Vegas Sands has so far hired 60 lobbyists to realize the company’s vision of the state giving its blessing to casinos.

One of the committees those lobbyists may approach is the Texas House Licensing and Administrative Procedure Committee, whose purview includes considering legislation that regulates gaming industries.

In an interview with The Texan, Rep. Art Fierro (D-El Paso), a member of the committee, indicated he is open to the idea of legalizing casinos in Texas, provided that there is community buy-in where the casinos would be located.

“The tax base — right now with everything that’s happened to our economy because of the pandemic — could really use the stimulus, could really use the support. It would help our local property tax,” Fierro said, pointing to the economic benefits Texas loses when people travel out-of-state to gamble.

Fierro also highlighted that he thought his constituents would be open to the concept.

“I think that my constituents want economic development, they want relief from taxes, they want more jobs, I think those are all things that my constituents want and […] I think El Paso County needs,” Fierro contended.

However, Fierro noted, “Any bill that I think would be good for Texas as a state should include tribal gambling,” adding that the three federally-recognized Indian reservations in Texas should be treated equally in terms of the licensing of new casinos.

“I think if we’re going to do it for one, we should do it for all three, assuming the community can support it,” Fierro said.

Rep. Joe Deshotel (D-Beaumont) has proposed a constitutional amendment in the Texas House that, if passed, would require the Texas legislature to author the necessary laws to facilitate the licensure of nine new casinos near the Texas coast. The amendment would be put to the voters in a November referendum.

Deshotel’s legislation would also create a compact with the KTTT to allow them to operate a casino with Class III gaming under the IGRA. The compact would have to be approved by the federal government.

However, pushback from parties that are mindful of the risks of addiction and family values — not to mention a state legislature that is short on time — may diminish the prospect of more casinos.

Texas Values is an advocacy organization that has considerable influence among Republican lawmakers. The Austin-based group states its vision is to “stand for biblical, Judeo-Christian values by ensuring Texas is a state in which religious liberty flourishes, families prosper, and every human life is valued.”

Jonathan Covey, director of policy for Texas Values, stated the nonprofit’s opposition to legalized casino gambling.

“We don’t support legalization of casinos in Texas. It’s not good for families and it’s not good for the economy,” Covey told The Texan.

There are other issues that present themselves in a state where casinos are commonplace, such as the enforcement of laws designed to protect the casinos themselves. 

For example, casinos and authorities in Colorado were reportedly notorious for aggressively prosecuting casino customers — even unwitting ones — who violated laws that prohibit using leftover credits in slot machines or picking up dropped chips off the floor.

Enforcement is just one of the issues the legislature would have to consider as the clock is ever-ticking on the regular session. The session has only 105 days remaining and lawmakers already have a slew of items to address before the summer.

Speaker Dade Phelan (R-Beaumont) has reportedly expressed his interest in commercial casinos, with the caveat that they should be treated as an extended project rather than a temporary measure to fend off budgetary problems.

“I told them what I’ll tell y’all. It’s about jobs, it’s about ad valorem, it’s about a real long-term commitment to those communities where those casinos […] exist,” Phelan said, according to a social media post by the Texas Tribune. “But if you’re coming in here trying to plug a $4 billion hole in this budget that we will write by May of this year, it’s just, it doesn’t work.”

A bill to legalize casinos would require the approval of Gov. Greg Abbott. His previous statements on the issue signal that may be unlikely.

When the AC Tribe and Rep. Brian Babin (R-TX-36) sought legislation at the federal level to solidify the tribe’s legal standing to operate Naskila Entertainment, Abbott sent a letter to members of Congress vehemently opposing the bill. He blasted the effort as an impingement on the state’s right to regulate casinos.

This time around, though, the governor may be willing to entertain the notion. Abbott reportedly indicated that he wants to keep lines of communication open among legislators, their constituents, and the governor’s office.

“One thing I want to do is, when the members get to town, I want to have the opportunity to visit with the members, get a feel for where they are, and importantly they’ll have extremely good input from their constituents,” Abbott told the Tribune in an interview after his state of the state address.

“And so what we all need to hear is what is the voice and the pulse of our constituents, and one of the best ways to get that is talking directly to the members who will talk to their constituents about it.”

Lt. Gov. Dan Patrick has been less receptive. He said last week in a radio appearance that gambling legislation will probably be unsuccessful due to the issue being fraught with “competing interests.”

“That’s why it never goes anywhere, and so it’s not even an issue that’s going to see the light of day this session,” Patrick said.

In any case, proposals such as Deshotel’s constitutional amendment would not require gubernatorial approval. Texas voters could end up deciding the question directly.

Such an amendment would have a strong chance of passing. A recent poll by the University of Houston Hobby School of Public Affairs, with a margin of error of plus or minus 2.7 percent, showed that 50 percent of Texans support allowing “full casino gambling like in Nevada [and] Louisiana.” 

Only six percent said they support banning all gambling, 15 percent would leave the laws as they are, 15 percent would support casinos on Indian reservations and “existing horse and dog tracks,” and 14 percent did not offer an opinion.

Of those who gave an opinion, 65 percent of Democrats, 53 percent of Republicans, and 60 percent of independent voters supported the full legalization of casino gambling.

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Hayden Sparks

Hayden Sparks

Hayden Sparks is a reporter for The Texan. He has coached high school competitive speech and debate and has also been involved in community theater and politics. A native Texan, Hayden served as a delegate at the Republican Party of Texas Convention in 2016. He is on track to receive a bachelor’s degree in psychology from Liberty University. In his free time, Hayden is known to take walks around the neighborhood while listening to random music on Spotify.