The state’s CFO says he does enough gambling with his family farm that he’d personally pass on any opportunities to play games at a legalized casino or wager on sporting events on his phone.
But late last month, he said he’d be OK with gaming in the state if legislation were ever passed by the Texas Legislature.
Texas Comptroller Glenn Hegar discussed this issue among others at a panel at last month’s Texas Tribune Festival in Austin. Hegar answered wide-ranging questions from Alexandra Suich Bass, culture editor at The Economist, discussing opportunities and challenges for the state’s economy — including how to bolster education funding in Texas.
Glenn Hegar’s thoughts on legalized gambling in Texas
Could Hegar see legalized casino and/or sports betting in Texas ever going toward helping fund education in the future?
“I think it can. But you know, I will say, I am not one that thinks that, oh, let’s go have gambling so we have public education,” Hegar said. “Over the years I’ve talked about it. I don’t think that that’s the proper funding source. That’s my personal opinion. I just think ‘Really, we want to encourage you to gamble so I can educate my kids?’”
The former Texas Senator and Representative told the approximately 200 people in attendance he would be OK with legalized gambling, but it’s simply not for him.
“I grew up on a family farm. And let me just tell you, that is the biggest gamble of any game. … I’m being serious because we gamble a lot of money on God and nature,” Hegar said. “And so I don’t care what you do with your money. I really don’t care if that’s what you enjoy doing. That’s not my decision. I think that’s someone’s own personal choice.”
In his ninth year in the job, Hegar is now responsible for the books for the ninth-largest economy in the world. As part of his job with potential legislation, he and his staff have to mark up any potential legislation in regards to economic impact to the state. During last year’s legislative session, proposed gambling legislation would have added an extra $200-350 million in annual tax revenue according to estimates.
What happened at 2023 legislative session
In 2023, the Texas Legislature made history when the House passed a resolution and a bill that would allow voters to amend the Constitution to legalize online sports betting in the state. The Senate took no action on the legislation.
Lawmakers filed two pieces of casino legislation in 2023 that would have allowed for up to seven destination casinos throughout the state. One of the House bills made it out of committee, but consideration for it died when there was no full vote in the House.
Mobile sports betting
Sponsored by Rep. Jeff Leach (R-Plano), House Bill 1942 outlined rules on sports betting in the state and called for a constitutional amendment for Texas citizens to vote on.
The legislation (and its accompanying joint resolution) made it out of the House. It was the first time either chamber in the Texas Legislature passed a sports betting measure. The Senate took no action on the bill.
At the time, Lt. Gov. Dan Patrick declared the Texas Senate wouldn’t “waste time” on sports betting and would not call any bill in the Senate that does not have predominantly Republican support.
Leach’s push for the legislation was led by the concept that sports betting is already happening in Texas. It’s just happening illegally and through offshore sportsbooks. HB 1942 sought 16 online sports betting licenses to Texas sports franchises or facilities. It would have taxed operators at a 15% rate, and 98% of that revenue would have been directed to property tax relief.
Resort-style casinos
Legislation to open resort-style Texas casinos met its fate when neither House Joint Resolution 155 nor House Bill 2843 were called for a final vote in the session. (Which puts the possibility of online casinos in Texas in the near future at … squat.)
HB 2843, sponsored by Rep. John Kuempel, R-Seguin, would have allowed for resort casinos in Texas licensed through pari-mutuel race tracks in major metropolitan areas. It also would have allowed for retail sports betting at licensed casinos.
Kuempel said capturing “lost revenue” was one of the many reasons to pass HB 2843. Louisiana Gaming Control Board Chairman Ronnie Johns estimated last year that 85% of the Lake Charles casinos’ business came from Texas. Just a 30-minute drive from the Texas border, those casinos, L’Auberge and Golden Nugget, now report more than $30 million in monthly revenue each.
Currently, there are three tribal casinos in Texas. However, none are full-service Class III gaming facilities.
Texas Lottery has a splendid FY 2023
When discussing the state’s budget, one of the most talked about topics is funding education. A subset to that is always a discussion on how to raise teacher salaries to make those jobs more attractive to potential applicants.
The Texas Lottery was set up in 1992 in part to provide monies to the Foundation School Fund, which covers operational needs and special program services for Texas school districts, including teacher salaries, utilities, equipment, bilingual education, special education, gifted and talented education, and career and technical education. In 2023 alone, the FSF received $2.131 billion from lottery sales.
As Texas continues to turn away from sports betting and casinos in the state, one form of gambling continues to thrive. In its 30th year in existence, the Texas Lottery once again set a record for sales in a year, according to a press release distributed this week.
According to the Lottery Commission, the lottery achieved a record $8.73 billion in sales for fiscal year 2023, which ended Aug. 31. Those sales resulted in $2.162 billion to fund Texas public education and veterans’ services with $2.131 billion going to the Foundation School Fund.
Sales in FY 2023 increased by $428.8 million, or 5.2%, over FY 2022, according to the commission. The Texas Lottery has now seen sales growth of $2.474 billion, or 39.6%, over the past five years.
“The Texas Lottery is proud to announce it has crossed the $2 billion threshold for funds generated for public education and veterans’ services in Texas for the first time,” said Gary Grief, executive director of the Texas Lottery, in a press release. “The record revenue transfer to the state confirms the Texas Lottery’s unwavering commitment to its mission and pivotal role of supporting its beneficiaries.”
