Texas mulls sports betting and retail gaming bill

Texas legislators have proposed a constitutional amendment to allow regulated retail casino gambling and authorizing sports betting in the Lone Star State. Authored and sponsored by Texas Senator Carol Alvarado, bill TX SJR17 aims to “foster economic development and job growth” while also providing tax-related funding for education and public safety-related causes. The document includes the creation of a Texas Gaming Commission, which would have the power to license retail casino operators on a limited basis, inclusive of four class I licenses, three class II gaming licenses, and two class III licenses. The bill also allows for the licensing of tribal gaming operators recognized by the US Department of the Interior. In the case of the non-tribal licenses, they can only be issued to conduct casino gaming at destination resorts located in “metropolitan statistical areas” with an estimated population of more than two million people as at July 1, 2021. However, this is subject to the provision that only one class I-licensed destination resort is located within any metropolitan statistical area. “The legislature by general law may develop additional considerations and requirements for licenses to conduct casino gaming, and restrictions and penalties for the conduct of casino gaming in this state,” TX SJR17 states. To ensure economic development in the state, and that the resort operators deliver on their obligations once licensed, the bill requires monetary commitments from the operators concerned. In the case of metropolitan areas where the population exceeds five million, the guarantee amount is $2bn, falling to $1bn in an area where the population is between two and five million people. Bill TX SJR17 calls for the implementation of a 10% tax on gross gaming revenue (GGR) from table-based gaming, rising to 25% of GGR in respect of slots games. While the bill includes broad, sweeping detail on the proposed casino gambling licensing and taxation regime, there is little or no definition on the proposed licensing and taxation regime for sports betting, save for language in the main issue authorizing the vertical. Functioning as a proposed constitutional amendment, the bill, once it passes through both chambers of the Texas legislature, will be put to a public vote to be held on November 7, 2023. The subject of gambling legalization in Texas was previously proposed by prospective Democratic Governor candidate Beto O’Rourke, who suggested the measure would create billions of dollars in revenue for the state. O’Rourke was soundly defeated by incumbent Governor Greg Abbott, who fought off his challenger and won by 54.8% of the vote to O’Rourke’s 44%. Texas is the second most populous state in the US, behind California with 29.2 million residents, and would represent a huge market for the US gambling industry.