Texas Proposal for Four Destination Casinos Is Dead in the Water, Policy Analyst Predicts

Posted on: March 10, 2021, 11:51h. 

Last updated on: July 7, 2021, 01:45h.

Ed Silverstein @casinoorgedsilv Read More
Expertise: Legal, Tribal Gaming.

A new bill to open four destination casino resorts in Texas is unlikely to pass anytime soon, several veteran political analysts said this week. They forecast a similar fate for other gaming expansion efforts.

Lt. Gov. Dan Patrick’s opposition is critical
Casino and restaurant owner Tilman Fertitta shown here. Under a bill before the Texas legislature, he is a leading contender to get the license to open a destination casino in Houston. But the bill is unlikely to pass any time soon. (Image: Cooper Neill/Getty Images)

Under the proposal, commercial casinos would be built in Austin, Dallas-Fort Worth, Houston, and San Antonio. The proposal was introduced by Sen. Carol Alvarado, D-Houston, and Rep. John Kuempel, R-Seguin.

Known as Joint Resolution 133 in the House and Joint Resolution 49 in the Senate, the legislation calls for slot revenue at commercial casinos to get taxed at 25 percent and table game revenue at 10 percent.

Gaming operators who want to develop a casino in a metropolitan area where there are fewer than 5 million people must invest at least $1 billion. In more populated regions, casino operators must invest $2 billion.

Also, Texas’ three existing tribal casinos could get free slot machines under the bill.

Without expanded gambling in Texas, state residents now spend billions of dollars a year gambling in nearby states. Those states take a cut on the gaming revenue without any share for Texas.

Supporters say expanded legal gambling will lead to tens of thousands of jobs in Texas, and would curb illegal gambling in the state. Key support for casinos comes from Las Vegas Sands (LVS) Corp.

Also, there are several calls to enact sports betting in Texas. State Reps. Dan Huberty, a Republican, and Harold Dutton, a Democrat, both of Houston, authored a bill to legalize sports betting.

Under the sports betting proposal, 10 percent of revenue will pay for special education in Texas.

Also backing sports betting are the state’s pro sports teams. The teams form the Sports Betting Alliance.

Public Opinion Backs Commercial Casinos

Support for legalized casinos comes from many state residents who would have to vote to change the Texas constitution.

In the latest poll from the Dallas Morning News and the University of Texas, Tyler, 57 percent of Texans questioned support casino gambling. The poll also reveals just 29 percent of those questioned were flat-out opposed to commercial casinos.

Also, 43 percent of state residents favor sports betting, the poll adds.

When asked about the latest bill, Mark P. Jones, a political science fellow at Rice University’s Baker Institute, said it “has a little bit of something in it for everyone.

“The four destination casinos in the state’s four major metro areas provide both a lucrative option for one or more casino companies, and also help ensure political support by including the four metro areas that combined contain two-thirds of the state’s population,” Jones told Casino.org.

It appears LVS would get the “biggest prize.” That is the Dallas-Fort Worth Metroplex, Jones said. Casino and restaurant owner Tilman Fertitta would get the second-biggest prize: Houston.

Also, existing horse and greyhound tracks get gaming licenses under the bill.

But Jones continues to point out the legislation will, at best, lay the groundwork for another proposal when the Texas legislature meets again in 2023. “Casino gambling is dead in the water in 2021,” Jones said.

Dan Patrick Is Key in Process

Lt. Gov. Dan Patrick’s opposition — along with that of other Republican leaders — is critical in currently blocking the legislation in Texas, Jones adds.

“If Patrick, in particular, does not support a bill, its prospects of even reaching the Texas Senate floor for a vote, let alone garnering the requisite two-thirds majority, are about as close to zero as you can get without being less than zero,” Jones said.

In addition, Clyde Barrow, chair of the Department of Political Science at the University of Texas, Rio Grande Valley, points out a majority of Texans have supported legalized Las Vegas-style casinos for more than a decade.

“There is no reason to believe those numbers will change in the future,” Barrow said. “This gap between public policy and public opinion on casino gambling will not be closed so long as Republicans retain control of the Texas legislature and key offices of the executive branch.”

Brandon Rottinghaus, a political science professor at the University of Houston, agrees.

“Just because a majority of Texans want a policy change doesn’t mean it will occur because of political obstacles.”