AUSTIN — The state’s biggest sports teams, including the Dallas Cowboys, Texas Rangers and Dallas Mavericks, are mounting a major new effort to legalize sports betting in Texas, The Dallas Morning News has learned.
The Sports Betting Alliance said it has the backing of several Texas pro teams, including the Dallas Stars and FC Dallas. In exclusive interviews, the alliance, a coalition of these franchises and betting platforms, told The News it is backing legislation to let Texans vote on whether to undo the state’s ban on sports betting. More Texas teams will be announced as alliance members in the coming days.
“Unregulated and illegal sports gambling is already taking place in the State of Texas,” Charlotte Jones, the Dallas Cowboys’ Executive Vice President and Chief Brand Officer, told The News, according to a statement released by the Sports Betting Alliance. “Legalized sports betting would regulate the industry and generate hundreds of millions of dollars of new revenue for the state which will help fund critical programs without raising taxes.”
According to an analysis by ESPN, 25 states have legalized sports betting since 2018. But some of the largest potential markets, including California, Florida and Texas, have so far resisted the push to approve sports betting in any form.
Texas has long been a mostly untapped jackpot for gambling interests.
Republicans have resisted attempts to loosen the state’s laws or amend the Texas Constitution, which bans most forms of gaming, and this year, the GOP-dominated Legislature has many other pressing issues to tackle, including serious economic and public health problems caused by the pandemic.
But it’s been years since there’s been such a concerted effort to change lawmakers’ minds.
Before his death last month, Las Vegas Sands owner Sheldon Adelson had already made gambling a talking point ahead of this year’s legislative session, rolling out a multimillion-dollar lobbying effort to bring casinos to Texas. The revenue from sports gaming could be worth billions nationally, according to a market analysis.
Any attempt to relax the state’s gaming restrictions are a long shot, Austin insiders said. Sports betting, however, may have better odds of gaining the support of casino-wary conservatives who oppose gambling on moral grounds.
“My view is that Texas is going to be one of the 10 last states to allow gambling,” said Matt Mackowiak, a GOP consultant and chairman of the Travis County Republican Party. “I do think [sports betting is] a lighter lift, and it may be where they end up.”
In 2018, the U.S. Supreme Court ruled the issue of sports betting should be left up to each state. The Sports Betting Alliance took their cues from other states, especially Tennessee, Michigan and Colorado, that have recently legalized the practice.
According to details of the draft legislation provided exclusively to The News, sports betting would be open to anyone age 21 or older. A full list of eligible sports was not available, but a spokesperson confirmed betting on college sports would be allowed.
Bettors would receive a maximum of 90% of their winnings, the current draft bill states. According to Rep. Dan Huberty, a Houston Republican authoring the bill, 10% would go to fund special education in Texas.
“It could generate several hundred million dollars,” Huberty told The News.
Rep. Harold Dutton, a Houston Democrat just named to succeed Huberty as chairman of the influential House Committee on Public Education has also drafted a bill to legalize sports betting.
Since gambling is banned in the Texas Constitution, it would take two bills to legalize sports betting here: one to amend the Constitution, which requires approval from two-thirds of both the House and Senate, and one to enact the details of the licensing and regulation. If the amendment passes, it would then need to be approved by a majority of voters.
Proponents point to polling that found, if given the chance, Texans would vote to loosen the state’s gambling restrictions.
“I think it has a good opportunity to pass,” Huberty said. “Why don’t we come out of the dark ages here?”
In Texas, most gaming is banned other than bingo, the Texas Lottery and some horse and greyhound track racing. Indian tribes have fought for years to expand gambling here, arguing their status as federally recognized tribes and sovereign nations allows them to do so.
But only one tribe in Texas, the Kickapoo Nation, currently operates a casino here. That casino still lacks traditional slot machines and many other Vegas-style table games.
Texans are gambling in other states, taking the cash they could be spending here to casinos in Louisiana, Oklahoma and New Mexico. Recent estimates found Texans spend at least $2.5 billion annually at out-of-state casinos, some of which have also already partnered with Texas teams like the Cowboys and Rangers.
Texans are also already engaging in illegal sports betting. But since they cannot use official platforms, they turn to unofficial, or offshore, sports betting apps that don’t provide consumer protections.
“Fans wagering on the outcome of sporting contests has been happening for years,” said Neil Leibman, president of business operations and chief operating officer for the Texas Rangers, according to a statement provided by the Sports Betting Alliance. “It is time for sports wagering to come out of the shadows so it can be monitored and regulated.”
Under the current version of the Sports Betting Alliance’s bill, the state would sell permits, known as “skins,” to online platforms that partner with a pro sports franchise or horse racetrack. Some skins would allow only for mobile betting while others would permit on-site wagering at stadiums and tracks.
Platforms would have to show they have experience in sports betting, and the state would prohibit skins from being awarded to anyone convicted of a felony or other crimes involving dishonesty and breach of trust.
The Texas Department of Licensing and Regulation would issue the skins. Licenses would cost $500,000 for mobile betting and $50,000 for on-site operations, according to the draft bill. There would also be service provider and renewal fees.
It’s unclear whether legalizing one kind of gaming in Texas would hasten the state toward casino gambling. Opponents lean on the slippery slope argument, while proponents believe Texans might be sated with sports betting alone.
The loudest opponent of expanded gaming in Texas has long been the Christian Life Commission, representing the Baptist General Convention of Texas, and its lone lobbyist Robert Kohler.
He doesn’t think Republicans can justify backing any kind of gaming expansions when the state has lots of other needs lawmakers should be focusing on, from public health concerns and economic issues caused by the coronavirus pandemic to funding public education and redrawing the state’s voting maps.
And while supporters say revenue from legalized gambling could address some of these issues, state coffers will not be as empty as previously thought. State Comptroller Glenn Hegar’s recent economic forecast was rosier than lawmakers expected, dampening hints that gambling revenue could help backfill a massive budget shortfall.
Gambling should not be a priority, Kohler added, in a year when low-income Texans have been hit the hardest by economic woes of the pandemic.
“It’s an activity that preys on the poor,” he said, disagreeing with the argument that gambling should be legalized simply because many Texans are already doing it. “You’re always going to have folks on the fringes that are trying to get in between the wall and the wallpaper.”
Opponents also warn that amending the state Constitution to allow sports betting would open the door to Indian tribes, especially the Kickapoo Nation, who argue they should already be allowed to run full-fledged casinos here.
None of the state’s three federally recognized tribes responded to requests for comment about the push to legalize sports betting and casinos. But given their yearslong fight with the state over gaming rights, they will likely oppose any attempt to expand gambling if they aren’t explicitly written into the legislation. Legalizing sports betting for pro sports, but not tribes, could also land the state in court for giving teams an unfair market advantage and may siphon off traffic from the Kickapoo Nation’s casino in Eagle Pass.
Adelson’s death does not appear to have slowed the Las Vegas Sands efforts to expand his empire into Texas. The Sands boasts a team of 60 lobbyists. Adelson donated $500,000 to Gov. Greg Abbott and $25,000 to House Speaker Dade Phelan late last year and the Las Vegas Sands Corporation funneled at least $70,000 more to legislative groups, including the Texas Senate Democratic and Republican caucuses.
Andy Abboud, senior vice president of government affairs for the Las Vegas Sands, hopes the sports betting and casino efforts will work together to expand gaming options for Texans.
“We view sports wagering as a component of our efforts in bringing destination resorts to Texas and creating robust, long-term economic development and jobs for the state. We look forward to working in tandem with their coalition during the legislative session,” Abboud told The News.
The Sports Betting Alliance has not taken an official position on the effort to legalize casinos in Texas, a spokesperson said. But some franchise owners support both efforts. Dallas Mavericks owner Mark Cuban, for example, said he is in favor of legalizing both sports betting and casinos in Texas.
“I think it’s time,” Cuban said in an email. “It makes no sense for us to force Texans to go to neighboring states to gamble in casinos.”
The chances for expanding Texas’ gaming laws hinge on the state’s top elected officials.
It’s been years since gambling interests have mustered such a massive effort to push state leaders to consider loosening gambling laws. In 2015, a similar coalition of sports franchises succeeded in pushing a constitutional amendment, which voters overwhelmingly approved, to allow pro teams to hold raffles to benefit their charitable foundations.
That year, Gov. Abbott said he supported the state’s gambling prohibitions and told Texas Lottery officials to stop gathering information about sports betting games. But this week, Abbott did not immediately shoot down the idea.
“I want to have the opportunity to visit with the members, get a feel for where they are, and importantly they’ll have extremely good input from their constituents,” Abbott, a Republican, told The Texas Tribune.
Speaker Phelan, R-Beaumont, has said lawmakers cannot rely on potential gambling revenue to prop up the state’s budget. But his spokesman, like Abbott, struck a neutral tone.
“Each Member of the Texas House will bring a unique viewpoint informed by their district when considering proposals to expand casino gaming and sports betting,” Enrique Marquez said in a statement. “Members should judge the merits of each proposal based on whether it has long-term value to the state and their communities.”
Lt. Gov. Dan Patrick, a staunch conservative on both fiscal and social issues, is likely the biggest stumbling block.
The Texas Republican Party platform also opposes gambling and includes a plank criticizing the “burden” it would take to regulate legal fantasy sports. Notably, the alliance of teams pushing sports betting this year has not identified a Republican who will carry the bill in Patrick’s Senate.
Patrick also has ties to the sports world. Before public office, he worked as a sportscaster and later helped open several sports bars in Houston. His campaign consultant, Allen Blakemore, is a lobbyist for three sports betting companies involved in the Sports Betting Alliance — DraftKings, FanDuel and BetMGM.
Sherry Sylvester, the lieutenant governor’s senior advisor, said Blakemore and Patrick have not spoken about online sports betting.
Several other close advisors to top elected officials are also lobbying on behalf of either the sports betting industry or the Las Vegas Sands. Matt Hirsch, another spokesman for Adelson’s team, was once Abbott’s communications chief, and the Sands’ chief lobbyist, Gavin Massingill, has worked for several elected officials, including former Speaker of the Texas House Dennis Bonnen.
Bill Miller, a longtime Austin lobbyist whose partner is spearheading the sports betting push, said some of the most connected and experienced lobbyists in town have been hired to push gambling in some form this session. While he does not believe casinos have any chance of passing this year, Miller said it makes sense the push would continue in Adelson’s absence because it often takes years to make inroads on issues like this in the Legislature.
Whatever happens — whether it is legalizing sports betting, casinos or even just getting a conversation started — is good for gaming interests in the long run, he added.
“Casinos are the longest of the long shots this year,” Miller said. “But by playing, you lower the odds in your favor.”