Texas Sports Betting: Lone Star Long Shot Over Near-Term

Posted on: August 23, 2024, 04:37h. 

Last updated on: August 23, 2024, 04:37h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Hopes that Texas could put the issue of online sports betting to voters in November 2025, positioning the state for launch in advance of the 2026 football season, appear to be dashed as the State Senate remains a barrier.

Dan Patrick
Lt. Governor Dan Patrick (R-TX). He looms large as the reason why sports betting might not be approved in the state until 2027. (Image: Texas Tribune)

Last year, the Texas House of Representatives passed a mobile sports wagering bill, but that legislation failed to advance through the staunchly conservative Senate. With this year being a presidential election year, there was optimism that lawmakers in the Lone Star State would revisit sports betting in 2025, but Eilers & Krejcik Gaming (EKG) said politics makes that timeline unlikely.

The state Republican Party platform, published in June, instructs lawmakers to oppose (1) any gambling expansion, and (2) any budget that relies on funds from expanded gambling,” observed the research firm.

Legalizing sports betting requires an amendment to the Texas constitution and under state law, two-thirds majorities in both chambers of the legislature are needed before such amendments can be put to voters. Republicans control both houses of the legislature and the governor’s office.

Texas Still Tantalizing Sports Betting Industry

The state’s status as the second-largest by population in the US isn’t the only reason Texas is so coveted by sportsbook operators.

With online sports betting in Florida now a monopoly controlled by the Seminole Tribe and California a near certainty to follow a similar Tribal dominated model when it approves sports betting, Texas is the only one of the three largest states that will have a competitive commercial sports wagering market. Plus, it’s widely believed Texas will employ a tax regime that’s far more attractive to operators than what’s seen in other large states such as Illinois and New York.

Then there’s matter of slowing legislative progress on sports betting. Currently, 38 states and Washington, DC permit some form of sports wagering and of those that are on the sidelines, only Georgia and Texas qualify as large states that would have competitive markets, but related legislation died in Georgia earlier this year. The near-term outlook in Texas isn’t bright due to the aforementioned GOP platform.

It “explicitly addresses the warmer reception expansion has had in the House — the platform calls on lawmakers to ‘oppose any effort from the House leadership…to pressure members to vote for expanded gambling,’” added EKG.

Why 2027-28 Makes Sense for Texas Sports Betting

While 2027 for legalization and the following year for launch isn’t what Texas bettors and gaming companies want to hear, it makes sense because it’s possible that the 2026 mid-term elections bring change.

Though he has not publicly spoken on the matter, it’s possible that Lt. Gov. Dan Patrick (R) could opt to not seek reelection. He’ll be 76 years old at the time of the 2026 elections. In his role as lieutenant governor, he controls the State Senate and the House advances legislation that Patrick opposes, such as casino gaming or sports wagering, the Senate simply won’t deal with it.

Gov. Greg Abbott (R-TX) has warmed to gaming expansion and the Texas House is on board with sports betting. So are the voters, according to various polls. That leaves Patrick as the “gatekeeper” when it comes to sports wagering implying his decision on whether or not to run for reelection will loom large in sports betting’s future in the state.