Tuesday’s discussion drew a packed house to hear about the latest progress in the Lone Star State. David Rittvo, principal at Tailored Hospitality Advisors, moderated the discussion alongside three heads of governmental relations: Andy Abboud of Las Vegas Sands (LVS), Rick Limardo of MGM Resorts and Caesar Fernandez of FanDuel.
Abboud was the most bullish of the group, proclaiming several times that Texas gaming expansion is “inevitable.” Even if 2025 isn’t the year, he said, it will still be “another session of great progress.” When asked about the probability of passage next year, he asserted that it is now “greater than 50%.”
The path to legalisation is not easy–it requires a constitutional amendment, enabling legislation and passage through a statewide referendum. And as Limardo noted, the immediate hurdle is still senate support. In 2023, bills that would’ve legalised casinos and sports betting cleared the house but were killed in the senate.
“We have to show this is viable in the senate and get the votes there,” he said. He later confirmed that “we’ve been told directly we don’t have the votes.”
Fernandez added that the voter support for sports betting is there, citing polling data that said the majority of state voters want the right to vote on the issue. In terms of performance, he posited that the market would reach $250m in annual revenue and $1bn in tax revenue within five years. Currently, only New York produces similar figures, but its 51% tax rate is oft criticised.
Illegal market, neighbouring states
The prevalence of the state’s illegal market was referenced throughout. Abboud said that the dream of Texas being the biggest legal market is clouded by the fact that it already is among the biggest illegal markets. Rittvo joked that he knows of an illegal sweepstakes cafe within walking distance of a state police office. Fernandez pointed to data from Eilers & Krejcik Gaming that estimates the illegal sports betting market in Texas is worth about $7bn per year.
To make matters worse, if state residents are choosing to gamble legally, they are leaving the state to do so. Texas is flanked by Oklahoma and Louisiana, both of which have well-established gaming industries. Stakeholders in those markets have benefitted tremendously from Texas’ rejection of gaming. Oklahoma has land-based casinos while Louisiana has brick-and-mortar casinos, but also has legal digital sports betting.
“Voters see that money leaving the state and they’d like to see that return,” Abboud said.
Limardo echoed this by saying there’s “a lot of work to do with local stakeholders,” including tracks and sports teams, in order to band together to form a unified front.
Gaming in Texas? Not on my watch
With over 30 million residents, Texas is the second-largest US state by population behind California. It has long been considered the biggest untapped gaming market, with all three main verticals–casinos, sports betting and igaming–all yet to be legalised. Despite this, legislative progress has been slow.
One of the biggest reasons for this is Texas’ unique power structure. Lieutenant governor Dan Patrick controls the Senate and assigns all legislation to committees of his choice. He has for years stood as the gatekeeper to expanding gaming in the state.
Panelists were earnest Tuesday in their belief that Patrick would call bills for a vote if stakeholders can obtain the necessary support. “Once we swing them, (Patrick) will call for a vote,” Abboud asserted.
There is also the possibility that the results of the presidential election could change the landscape in Texas. Patrick is closely aligned with Republican nominee Donald Trump, who could appoint Patrick to a cabinet position if elected in November. Such a scenario would have a sizable impact on legalisative efforts moving forward.
Giving the people what they want
One key messaging theme that will continue to be stressed, panelists said, is that lawmakers’ approval would not legalise gambling. That power rests solely with the voters, and therefore officials would not face scrutiny for listening to their constituents.
“Nobody’s ever lost an election for voting for a sports betting or casino bill,” Limardo said.
Conversely, there’s also no guarantee that both casino and sports betting legislation would make it past both lawmakers and voters in one pass. Such a scenario would be a huge leap for a state that has opposed all gaming for decades. When asked by iGB about the possibility of one vertical going before the other, Abboud said it was “still an ongoing discussion and negotiation.”
“We’ll see what the legislative process will bear,” Limardo added.
Original article: https://igamingbusiness.com/casino-games/casino-regulation/texas-gaming-expansion-g2e/
