Casino, sports betting efforts find support in Texas House, but hurdles remain

The Texas House on Wednesday gave initial approval to legislation that would let voters decide whether to legalize casinos and online sports betting across the state. However, both proposals fell short of the 100 votes needed to advance out of the chamber, putting them in an uncertain position.

The House passed the casino proposal, House Joint Resolution 155, by a vote of 92-51 and then the sports-betting proposal, House Joint Resolution 102, by a 97-44 vote. Both resolutions need a two-thirds majority on final passage because they seek to amend the Texas Constitution.

In any case, proposals to expand gaming face long odds in the Senate, where Lt. Gov. Dan Patrick has repeatedly said there is not enough support. And they face a Friday deadline to receive final approval in the House ahead of the legislative session’s end on May 29.

Nonetheless, the House votes were the most progress gaming advocates have made since descending on Austin two years ago with an all-out lobbying blitz. The casino empire Las Vegas Sands has been especially prolific, spending millions of dollars on lobbyists, TV ads and campaign contributions.

The proposals to expand gambling went no further than House committee hearings in 2021, while the Senate did not even give them hearings.

The sports-betting proposal is backed by a coalition of pro sports teams in Texas and betting platforms. The author of the legislation, Rep. Jeff Leach, R-Plano, expressed hope that it would gain enough support to advance out of the House on Thursday.

“I’m hopeful and expectant that we can maybe get over 100 tomorrow,” Leach said on the floor Wednesday evening.

The underlying legislation for the constitutional amendment on sports betting, House Bill 1942, requires only majority support and received that on initial vote of 84-52.

The accompanying legislation for the constitutional amendment on casinos, House Bill 2843, had its consideration delayed until Thursday.

Opposition to the proposals came from a variety of angles. The most vocal detractor was Rep. Matt Shaheen, R-Plano, who from the beginning has fought the latest push to expand gambling. He warned that if Texas legalized casinos, the number of sex-trafficking and domestic violence cases would “go vertical.”

“This bill is not going anywhere,” Shaheen said. “The Senate has not even given this a hearing. This is dead.”

The head of the House Democratic Caucus, Rep. Trey Martinez Fischer of San Antonio, joined in the opposition to both proposals, saying the process was rushed.

“I’m not a ‘no,’ I’m a ‘not now,’” Martinez Fischer said. “Let’s spend some time and get it right.”

A fellow Democrat who co-authored the casino proposal, Rep. Yvonne Davis of Dallas, said the legislation is “not perfect probably at this point, but as we do with legislation every day, we continue to perfect it.”

Casino proposal gets strong reaction

The casino legislation generated the most debate Wednesday. It would create at least eight licenses for casino gambling at “destination resorts” across Texas, giving preference to metropolitan areas where horse-racing has already been authorized. It would also legalize sports betting.

The proposal’s author, Rep. Charlie Geren, said the legislation would lead to “world-class casinos” with shopping and entertainment. He also stressed it would happen only if voters approved.

“This is really about letting your voters decide,” Geren, R-Fort Worth, told his colleagues.

Geren amended the bill to set aside 80% of the new tax revenue from casinos for increased salaries for public school teachers and for cost-of-living adjustments for retired teachers. He also accepted multiple amendments to address geographic concerns, including one that would make the Austin area eligible for a casino license.

Still, Geren encountered opposition on several different fronts. State Rep. Eddie Morales Jr., D-Eagle Pass, sought to amend the legislation to carve out a casino license for the Kickapoo Traditional Tribe of Texas. The tribe has warned that its Lucky Eagle Casino in Eagle Pass could be hit hard by the creation of a license in the San Antonio area, home to many of its customers.

Morales’ amendment fell victim to a point of order — a procedural challenge — by Rep. Tony Tinderholt, R-Arlington. And Morales ultimately voted against the overall proposal, saying it would “devastate my constituency.”

In a jab at Sands, Rep. Matt Schaefer, R-Tyler, sought to amend the bill to exclude casino operators who do business in China and three other countries. Sands has several properties in Macau, a special administrative region in China, and Schaefer said he was concerned the company has an “irreconcilable conflict of interest” with the communist government.

Geren dealt with the amendment by convincing the House to apply the exclusion only to “mainland China.”

Online betting “not an expansion of gambling” 

The debate over the sports-betting legislation was smoother. The author, Leach, argued that it was “not an expansion of gambling,” just an effort to regulate the illegal online sports betting that is already happening across Texas.

He accepted amendments to the underlying legislation that included the National Lacrosse League in the proposal and raised the gaming tax from 10% to 15%.

Rep. Terry Canales, D-Edinburg, gave a full-throated endorsement of the legislation, saying it was all about giving Texans “freedom” over how to spend their money.

“We’re not building casinos with this bill,” Canales said. “We’re allowing people to play a game of chance,” like trading stocks online. “What’s the difference?”

There was still vocal opposition from Shaheen, who called online sports betting “worse” than casinos because it would be within reach of everyone with an internet connection.

Most of those who supported the sports-betting proposal but opposed the casino legislation were Republicans.

Senate prospects a long shot

Patrick’s coldness to expanding gambling loomed large over the House debate. Patrick has not outlined any substantive objections to the proposals but repeatedly downplayed their prospects in his chamber.

In the Senate, Republican state Sen. Lois Kolkhorst of Brenham is carrying the sports-betting proposal this session. It has not yet received a committee hearing.

Patrick has noted that casino advocates did not even file a bill in the Senate this session, adding that Kolkhorst’s sports-betting bill has received support from only a few other senators.

“I have not had one senator come to me who says they’re interested in voting for it” beyond those who have already signed on, Patrick said in late March.

Gaming advocates have long viewed House Speaker Dade Phelan as the state leader most amenable to expanding gambling. The Beaumont Republican represents a district on the border with Louisiana, where casinos are legal, and has said since 2021 he has no problem with bringing the establishments to Texas.

Gov. Greg Abbott is also open to expanded gambling after resisting it years ago. His office has said he is willing to consider a “very professional entertainment option” in line with the destination resorts that the Sands team is pushing.

Tickets are on sale now for the 2023 Texas Tribune Festival, happening in downtown Austin on Sept. 21-23. Get your TribFest tickets by May 31 and save big!