Hearing set for gambling bills and resolutions in Texas House

A series of bills and resolutions to expand gambling in Texas has been scheduled for a hearing in the House State Affairs Committee on Wednesday, March 22. Lawmakers will consider proposals to place casinos and sports betting on the November 2023 general election ballot.

Rep. Todd Hunter (R-Corpus Christi) is the chairman of State Affairs, which will hear bills by Rep. Charlie Geren (R-Fort Worth) and Rep. John Kuempel (R-Seguin) to bring casinos to Texas.

Geren’s House Joint Resolution (HJR) 155 proposes permitting casinos in large metropolitan areas, including Dallas-Fort Worth, Houston, San Antonio, Corpus Christi, and McAllen. Sen. Carol Alvarado (D-Houston) has also filed her own casino bill in the state Senate.

Meanwhile, Kuempel’s House Bill (HB) 2843 concerns licensing commercial casinos, creating a Texas Gaming Commission, and includes the horse racing industry. The legislation also includes sports wagering and the state’s three federally-recognized Native American tribes. Generally speaking, tribes want the ability to control their own gambling operations and be allowed to offer casino gambling, especially if they have to compete with commercial casinos.

Sen. Lois Kolkhorst (R-Brenham) and Rep. Jeff Leach (R-Plano) authored legislation to place sports betting on the statewide ballot and set up a program to license sports wagering operations. House State Affairs will hear Leach’s twin proposals, the constitutional amendment and the enabling bill.

The Texas Sports Betting Alliance (TSBA), one of the most prominent organizations supporting sports betting bills, stated in a news release on Friday that its research indicates the proposals by Kolkhorst and Leach, which include a 10 percent tax rate, could create $648.7 million in tax revenue for the State of Texas in the first five years. After the market matures, the state could reap $180 million every year, TSBA claims.

Of course, taxes would be levied on the gross gaming revenue of casinos and sports wagering operations if any of these bills become law.

While Texas has some of the strictest gambling laws in the country, they certainly are not the most onerous. Utah and Hawaii prohibit all gambling whatsoever, and there are other states that like Texas have not passed legislation to permit sports betting within their borders.

Opponents of casinos and other forms of gambling, such as Rep. Matt Shaheen (R-Plano) and socially conservative interest groups, contend the economic advantages are oversold and expanding gambling will lead to addiction and crime.

Another factor to consider is that many evangelical Christians consider it sinful to gamble in significant amounts of money. Many elected officials place their church membership and attendance on their campaign websites. For some, backing a casino bill might make for awkward conversation back home on Sunday morning.

None of the casino bills would “legalize casinos” per se. Building casinos would still be illegal for almost everyone, except for a handful of companies authorized by the State of Texas to construct “destination resorts,” a phrase coined by supporters to describe the proposed multi-million dollar developments that would include casinos.

Speaker Dade Phelan (R-Beaumont) indicated at the beginning of the legislative session that he would be open to limited expansion of casino gambling. Gov. Greg Abbott expressed similar thoughts in October, though the governor has been an opponent of gambling in the past and will likely approach the issue with skepticism.

Lt. Gov. Dan Patrick may be hard to persuade. Before the session began, Patrick remarked that he did not expect the issue to make progress this year.

Las Vegas Sands Corp. and its majority shareholder, Dr. Miriam Adelson, spent millions of dollars contributing to Texas candidates during the 2022 elections and hired dozens of lobbyists for this legislative session as they did two years ago.

‘Regulate an Industry’

Rep. Gene Wu (D-Houston) also filed legislation that would allow counties to regulate poker rooms. The legislation was filed as a gambling bill, but Wu characterized it differently in a social media post.

“It’s not a ‘gambling’ bill. It doesn’t legalize anything new. It’s a way to regulate an industry that’s been unable to be regulated so far,” Wu tweeted.

The regulation of poker rooms is a sore point for the State of Texas. The Office of the Attorney General warns against poker rooms and casino nights, but there is enough ambiguity in state law that some cardrooms continue to operate. As long as the players are betting against each other instead of the house, it seems lawful. It gets complicated when establishments charge fees of admission for players to participate in games.

In addition, state law confines legal gambling to a “private place” but it does not stipulate that it must be a home or residence. Wu’s bill would make cardrooms a regulated activity and revise the current statutes to make unregulated gambling only permissible in a “private residence” or “private dwelling.”

Wu’s bill would make it a Class A misdemeanor to operate a poker room in violation of a county’s regulations. Class A misdemeanors are punishable by up to one year in jail and a maximum $4,000 fine.

In 2019, the Harris County District Attorney’s Office filed accusations of money laundering, organized crime, and gambling violations against operators of poker rooms, charges that were ultimately dropped on account of reported conflicts of interest. The DA’s office referred the case to federal investigators.

Wu’s district is located in southwest Houston. He initially filed an incomplete draft by mistake and circulated a memo explaining his error to other legislators. The new version, HB 1601, is pending in the Licensing and Administrative Procedures Committee, but has not been scheduled for a hearing.

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