Tilman Fertitta is a major political donor in the state of Texas. He’s already donated nearly $1 million in the 2022 election cycle alone. How does Tilman Fertitta influence gambling in Texas?
In Texas, most forms of gambling are illegal, including sports betting. Fertitta has profited from that for years. Recent moves by the billionaire, however, suggest he might be interested in seeing those laws change.
Fertitta gets a double ‘bump’ from ruling
On the day the Supreme Court struck down the ban on sports betting, Fertitta spoke on CNBC’s “Power Lunch.” He confidently noted that he stood to “get a bump” on both the gaming and sports team ownership sides of the Court’s ruling.
That was 2018. At the time, Fertitta’s net worth was estimated by Forbes at $4.4 billion. Today, the restaurateur, casino owner and owner of the Houston Rockets is worth $5.6 billion.
With interests in the hospitality, pro sports and gambling industries, Fertitta’s influences are worth examining against the backdrop of the push to legalize gambling in Texas.
Profiting off Texas gamblers
Fertitta bought his first Golden Nugget casinos (Las Vegas and Laughlin, NV) in 2005. Since then, he’s expanded to Atlantic City, NJ; Biloxi, MS; and most recently, Lake Charles, LA.
The Golden Nugget Lake Charles relies heavily on traffic from Fertitta’s hometown market of Houston. The Louisiana Gaming and Control Board estimates that over two-thirds of all casino gamblers in Louisiana come from out of state. With its proximity to Houston, that number is likely much higher in Lake Charles.
Fertitta donates to opponents of legal gambling
When the Golden Nugget Lake Charles opened in 2014, Fertitta was one of two major gambling-related donors to Gov. Greg Abbott’s first gubernatorial campaign. Fertitta donated over $250,000. The Choctaw and Chickasaw Nations in Oklahoma (owners of the Choctaw Casino And WinStar World Resort and Casino) donated nearly $1 million.
Abbott, at the time, was focused on curtailing discussion on gambling development. He wrote to the Texas Lottery as it was collecting data on sports betting expansion.
“State laws on gaming are to be viewed strictly as prohibitive to any expansion of gambling. This statutory framework is properly intentioned to protect our citizens, and I support it wholeheartedly.”
A clear purpose behind donations
Dan Patrick also stepped into office as Lt. Governor in the same year. His agenda regarding legalized gambling echoed Abbott’s. Fertitta donated more than $130,000 to his campaign. Landry’s/Golden Nugget Company owned by Fertitta spent more than $150,000 on lobbyists in 2015.
Patrick, as leader of the state Senate, holds significant sway over any legislative efforts to legalize gambling. He has opposed all efforts to legalize gambling in the state, from pari-mutuel horse racing to retail casinos and sportsbooks.
In 2015, Patrick tapped Fertitta and 54 other “best and brightest” members of the private sector to be a part of his Lieutenant Governor’s Board of Private Citizens. Patrick’s think tank had the goal of advising legislators on business and industry from a broad spectrum of leaders who are “in the trenches everyday.”
In the mid-2010’s, the angle for Fertitta’s donations and involvement seemed pretty clear. They were to cultivate opportunities for growth in his restaurant empire, keep gambling out of Texas and funnel those gamblers to Louisiana.
With his purchase of the Houston Rockets in 2017 and the Murray v. NCAA ruling striking down the ban on sports betting, Fertitta’s political interests started to diversify.
Interests turn to online gaming, sports betting
In 2018, when speaking to CNBC, Fertitta predicted that “the big movement will be in online gaming. You can just watch for that and book it.” He may have been trying to pump the tires of his own Golden Nugget Online Gaming (GNOG). It launched in 2013 in New Jersey.
GNOG offered online casino games, including live dealers, and eventually added a sportsbook. At the time, it was a leader in iGaming, as DraftKings and FanDuel were still relatively small-scale operations.
Fertitta may also have been positioning himself to cash in on the burgeoning in-stadium sportsbook industry. There still aren’t many today, but even in Texas where sports betting is illegal, sports owners are setting up partnerships.
Texas pro teams sign partnerships
The Houston Astros and BetMGM signed a partnership in May. The Houston Texans signed a multi-year deal with Caesars in August 2021. In May, Fertitta finalized a sale of GNOG to DraftKings for $1.5 billion, as reported by Culturemap Houston.
“DraftKings’ agreement with Fertitta Entertainment will provide for it to become the exclusive daily fantasy sports, sports betting, and iGaming partner of the Houston Rockets. Additionally, if sports betting becomes legal in Texas, DraftKings will open a sportsbook at the Toyota Center.”
This deal, anticipated by the “get a bump on both sides” comment back in 2018, presents some insight into Fertitta’s complicated business interests and his foresight. In the few areas where in-stadium sportsbooks are up and running, they’ve proven successful with fans. Having a relationship with DraftKings gives the Rockets a solid business partner to launch what would undoubtedly be a major financial win for both.
Fertitta ups donations to Abbott
In 2014, the rationale for Fertitta’s campaign donations looked clear. Keeping sports betting out of Texas helped his local casino interests in Louisiana. In 2022, with the new partnership between the Houston Rockets and DraftKings, the rationale is more complex.
Fertitta has maintained his status as a stalwart donor of both Abbott and Patrick, Texas’s two most powerful political opponents of legal gambling. Abbott has shown more open-mindedness recently.
In 2018, Fertitta donated $200,000 to Abbott and $100,000 to Patrick. In 2022, Fertitta has, so far, donated $412,000 to Abbott and $100,000 to Patrick.
With more to gain by legalizing sports betting now than during the last election cycle, Fertitta’s campaign contributions to the governor have more than doubled. What’s more, after Abbott and Patrick, Fertitta’s next biggest contribution is to Texas Speaker Dade Phelan. He openly supports legalized gambling in Texas.
Fertitta seems on same side as Vegas Sands PAC
One might argue that Fertitta, a Texas entertainment and hospitality magnate, is simply ensuring connections with the most high-leverage politicians in the state. However, worth noting alongside Fertitta’s donations are donations made by the Vegas Sands PAC.
Sands has donated $150,000 each to Abbott, Patrick and Phelan. In the past, Fertitta’s contributions and lobbying efforts could be seen as an offsetting factor to the work of the Sands PAC. That is not so clear now.
In 2022, with the broader support and recognition of the Sports Betting Alliance, a PAC that all major Texas sports teams endorse, Fertitta’s donations could mean something different.
Will donations lead to change?
Is this money spent on firming up the defense against legalized gambling or on reshaping the political conversation in the 2023 legislative session? With the Houston Rockets aligning with an online sportsbook, the status quo seems less likely.
Texas’s most high-profile politicians are now seeing significant influxes of money and influence on the side of legalized gambling. How will this translate into political conversation in Austin?
Abbott has said, “What we all need to hear is the voice and the pulse of our constituents.” Fertitta, a highly-successful and multifaceted presence in Texas business and politics, brings a perspective to the table rooted in an entrepreneurial spirit that many Texans admire.
More interestingly, though, he brings a perspective on the casino gambling and sports betting industry that Texas politicians cannot afford to ignore for much longer.