Sports betting finally got a hearing in the Texas legislature, and the reception was warmer than expected.
It took Rep. Dan Huberty nearly two months to get the hearing since introducing sports wagering implementation bill H 2070 and constitutional amendment HJR 97 in February.
That was no surprise given the conservative stance Texas has and continues to take on gambling.
But, with a couple of reasonable changes, it appears he might be able to get the bills through the State Affairs Committee and onto the House floor.
With Texas having no commercial casinos, the state’s professional sports teams and horse racetracks are pushing for the bill. Each would be allowed to offer retail sportsbooks and one mobile wagering app.
Huberty makes his case for Texas to legalize sports betting
Huberty pointed out that the Houston Chronicle and San Antonio Express newspapers publish sports betting lines.
“Why does the Houston Chronicle have a sports betting line when we don’t have betting in the state of Texas?” Huberty said. “… Because gambling is happening in Texas.”
Huberty seemed to make headway with colleagues by providing them polling done in their districts indicating that their constituents support legalizing sports betting.
“Give our constituents an opportunity to say yes or no,” Huberty said. “We’re their representatives. We don’t just get to say yes or no, because we have to listen to our constituents.”
Rep. Richard Raymond said he traditionally opposes gambling bills but was coming around to Huberty’s point.
“It’s taken time for me to move on this stuff because I don’t particularly like gambling. It doesn’t do anything for me. … But sometimes when I vote for something it’s because I really feel like my community wants it. … I’m pretty sure it will pass in Laredo County on the ballot. Actually, I’m pretty damn sure it will pass.”
Amendments could bolster chances for Texas bills
To get his support, Raymond urged Huberty to find a way to include the Kickapoo Traditional Tribe of Texas, which operates one of two Class II tribal gaming facilities in the state.
Jennifer Hughes, a lobbyist for the Kickapoo, later said that the tribe would support the bill if it included two amendments. One clarifies that the tribe could offer sports betting and fantasy contests. The other ensures that fantasy sports can’t use graphics that feel like slot machines.
Huberty said he would be happy to meet with Hughes and Rep. Eddie Morales, whose district includes the Kickapoo Indian Reservation, to discuss adding the amendments.
He also committed to Rep. Donna Howard that he would support her amendment to include the WNBA and make sure women’s sports are represented in the bill.
Sports teams testify in support of Texas sports wagering
Representatives of the Texas Rangers and Houston Rockets spoke in support of the legislation.
The Texas Sports and Entertainment Recovery Act authorizes retail and online sports wagering for professional sports teams from Major League Baseball, the NBA, NHL, NFL, and MLS.
Neil Leibman, co-owner and president of the Rangers, contended that Texas teams wouldn’t be able to sign the players to compete with teams from other states without sports wagering.
“I know each and every one of you have your favorite Texas sports team. If we do not adopt this, we will have a series of sports teams that will be noncompetitive. And I say this because all the other states that are legislating this are creating additional dollars for sports teams to go out and secure the best and highest quality players for their team. We will be a competitive disadvantage for every team in Texas, for every sport in Texas, if we have to compete against New York, Arizona, Louisiana and other states where dollars are going to sports teams.”
Others testifying in support of sportsbooks
Eric Schippers from Penn National Gaming, which operates Sam Houston Race Park and Retama Park, said sports wagering would provide a shot in the arm to racetracks that have seen racing facilities in neighboring states get casino gaming.
The Sports Betting Alliance projects sports betting could generate $180 million in revenue for the state in year one. That could grow to $400 million at market maturity. However, the state comptroller projected a much more modest $38 million to start.
Scott Ward, a lobbyist representing sportsbook operators DraftKings, FanDuel, and BetMGM, asserted that legalizing sports betting in Texas would bring more than just revenue from wagering.
“This is a new and emerging business, so when it’s legalized in a state they do a heck of a lot of advertising,” Ward said. “I was told by my client that I could easily suggest to you that the number would be in the hundreds of millions of dollars in the state of Texas if sports betting were legalized here.”
What’s next for Texas sports betting efforts
The only real pushback Huberty got from the committee came from Rep. Matt Shaheen, who argued that projected revenue numbers from gambling expansions in other states often are overestimated.
He went on to say that many states that legalized sports betting went on to run budget deficits anyway.
But an unlikely source jumped in to defend sports betting revenue in Raymond.
“I have no doubt what whatsoever that there will be an increase in revenue. … I’ve worked on the budget long enough to know that we’ve better find additional sources of revenue. If you try to point to another state and say, ‘Oh, they have gambling now or sports betting and they had to cut back on their budget,’ they’d have to cut it more if they didn’t have these revenues coming in.”
It still seems highly unlikely that Texas will legalize sports betting this year. The bills are starting in the House because they will have a much more difficult time in the Senate.
But if Huberty could get bills through committee that tribes in the state support, it would be a great first step for sports betting legislation in Texas. And passing legislation through the House would be an accomplishment for this year.
The Texas legislative session runs through May 31. Bills must cross over from one chamber to another by May 14.
