Beto Gives Texas Online Gamblers Hope

Beto Ups The Ante In Texas, But Online Casino Gambling Still Years Away At Best

Texas is not a gambling-friendly state at the moment. That could start to change, however, if Democratic gubernatorial candidate Beto O’Rourke puts into action what he said on Wednesday. O’Rourke claims that if he’s elected on Nov. 8, he’s “inclined to support” both “legal casino gambling and sports betting in the state of Texas.”

As far as casinos go, he’s probably talking about retail gambling for now. However, that would be a necessary first step towards eventually having an online option.

O’Rourke said residents are already traveling to engage in both retail and online gambling outside of the state.

During a press conference, he spoke about the obvious benefit to legalization:

“We would be able to bring in billions of dollars more.”

Sports betting is leaving Texas behind

To the east and west, Texas is surrounded by legal sports betting states. Only its northern neighbor, Oklahoma, lacks legal sportsbooks. That said, New Mexico doesn’t have online sports betting and isn’t likely to add it any time soon, according to Online Poker Report‘s sister site, Legal Sports Report.

Hypothetically, if Texas does eventually legalize all forms of online gambling, it would be a big prize. Its 30 million residents would nearly equal the populations of the top three US online casino states.

Michigan, New Jersey and Pennsylvania contain nearly 32 million people put together. Last year, each one of those states generated more than $1 billion in iGaming revenue.

Though O’Rourke seems to be leaning in that direction, don’t count on it happening too soon.

If online sports betting becomes a reality in the second-most populous American state, it likely won’t happen until next year. Retail casino construction would likely take years. Getting those forms of gambling underway would set the stage for online casinos, but that would take several more years, at least.

Here are the reasons for that.

Online gambling legalization lags behind sportsbook laws

US online casinos have a strong toehold in the eastern part of the country, with six states live:

  • Connecticut
  • Delaware
  • Michigan
  • New Jersey
  • Pennsylvania 
  • West Virginia

However, legal online sportsbooks far outnumber and generally predate online casinos. Right now, 19 states and the District of Columbia are home to legal online sportsbooks.

The most recent online sports betting launches were:

  • New York on Jan. 8
  • Louisiana on Jan. 28

New York is an example of how sports betting can kickstart the conversation about online casinos. Empire State legislators made an effort to legalize iGaming this year, though those bills never reached a vote.

That lag generally happens because lawmakers tend to have more reservations about online casino gambling than sports betting. One concern they have is that they consider online casino wagering “Big G” gambling, which they believe requires study before legalization. They and their constituents suffer from the widespread misconception that sports betting is relatively safer.

Another big – and possibly unfounded – concern is that retail casinos may suffer if they legalize iGaming.

For instance in Illinois, where online sportsbooks launched in March 2020, an iGaming bill flopped during 2021.

That happened after a lawmaker voiced exactly that concern in April 2021. Rep. Bob Rita asked during the Illinois House Executive Committee if online casinos would cannibalize retail casino revenue. The committee chairman was listening to testimony about the Internet Gaming Act (IGA), which he’d sponsored.

IGA didn’t pass last year, to online gambling advocates’ chagrin. It has now been more than two years since Illinois legalized online sports betting and the state doesn’t have legal online casinos.

Online casino approval is usually simultaneous

Sports betting might get the conversation started, but so far most online casino success stories have gone the omnibus route, instead.

The most recent states to legalize and launch online casinos did so as part of package deals with online sports betting:

Along those lines, Kentucky Senators didn’t bring HB 606 up for a vote on March 30. The measure would’ve legalized online poker and sports betting, though not casino gaming. However, the bill failed to reach the finish line on the last day of the Kentucky General Assembly session.

Retail casino dearth in Texas

A common belief about online gambling is that it won’t be legalized if retail gambling isn’t there first.

So far, it has been true that if a state doesn’t have land-based casinos, lawmakers won’t even consider the online version.

There is one notable exception when it comes to sports betting: Tennessee.

Online sportsbooks launched in the Volunteer State in November 2020. However, even now, Tennesseans have to travel out of state to visit commercial or tribal casinos.

Kentucky also lacks land-based casinos, and attempted to follow in Tennessee’s footsteps, but failed.

Texas has no commercial casinos and only one full-size tribal casino, which is only a Class II gaming facility. That means it can offer slots-like “bingo machines,” but not true slots or table games.

Kickapoo Lucky Eagle Casino Hotel is in Eagle Pass, a small town near the Mexican border. At that point, Texans may consider crossing the border, as both retail casinos and online gaming are legal there.

Meanwhile, the Ysleta del Sur Pueblo tribal entity of El Paso presented an argument in February to the US Supreme Court in order to start offering electronic bingo, as well.

Was Beto just talking about retail casinos?

O’Rourke’s exact wording leaves things ambiguous. Whatever his intent, it seems unlikely that a conservative state like Texas would go from virtually no gambling to full-package online gambling in a single step.

However, just about every publication reporting on his statement ends up discussing online gambling, as well as retail casinos.

Perhaps O’Rourke meant both.

It’s hard to know, because the gubernatorial candidate only spoke about gambling for 30 seconds out of more than 40 spent discussing Texas property taxes:

“If we were to make legal casino gambling and sports betting in the state of Texas, which – as you all know – many Texans engage in now, it’s only that those revenues go to other states and to other state governments, we would be able to bring in billions of dollars more.

“And from listening to Texans across the state, one, it’s a very popular proposal. And two, I think it would also help us to address some of the challenges that we have in reducing inflation and property taxes in the state of Texas. So I think that warrants a very close look and it’s something that I’m inclined to support.”

On his gubernatorial campaign site, the former congressman and presidential candidate blames incumbent Gov. Greg Abbott for property taxes increasing “$20 billion since he took office.” Abbott first entered office in 2014 and, if reelected, this will be his third term.

A poll of Texas voters in March found Abbott in the lead at 42% and O’Rourke narrowly behind, at 40%. The Lyceum survey has an error rate of plus or minus 2.83%, so a win may be well within reach.

Texas online gambling talk gets attention

In Texas, even 30 seconds of discussion about gambling gets noticed.

O’Rourke was already on record as advocating expanding Medicaid and legalizing marijuana in order to generate enough state tax revenue to accommodate lowering property tax rates. He mentioned gambling expansion as another possible method.

The press conference about lowering property taxes features O’Rourke and elected leaders standing on a lawn in Dallas County, across from what appear to be single-family homes. Amid wind and traffic noises, O’Rourke talked about how he would ensure Texans could remain in their homes, despite rising property tax rates.

About halfway through, he mentioned wagering.

As of yesterday, O’Rourke’s video that was largely about what he termed the “property tax crisis” had 968 reactions, 509 comments and 6,800 views.

It’s hard to tell if his talk about gambling within that video is what’s garnering the attention.

Because an April 20 tweet by the Houston Chronicle linking to its gated article, Beto O’Rourke Calls For Legalizing Casino Gambling, Sports Betting In Texas, had 520 retweets, 81 “quote tweets” and 2,318 “likes” as of last night.

For context, O’Rourke’s most popular Facebook video is a San Antonio rally on Friday. The recording has 1,300 reactions, 649 comments and 10,000 views.

Why Texas is an online gambling long shot

LSR notes that in order to legalize online gambling, Texas will also have to amend its constitution.

So just about every effort to expand gambling in Texas stops at the door of reluctant lawmakers.

The Texas Tribune explains one retail casino expansion effort in an article published on June 16, 2021:

“Las Vegas Sands ended up spending as much as $6.3 million on lobbying at the Capitol, according to state records, plus what the company pegged as at least $2 million on a statewide ad campaign. It is likely that the company’s total spending topped $10 million, given the number of weeks that the company stayed on the air in the state’s most expensive media markets.”

Short legislative sessions are another impediment

What’s more, the Longhorn State’s efforts will be hampered by its unusually short legislative sessions.

The Texas Legislature meets for 140 days, and only during odd-numbered years. That’s an even shorter calendar than the one for the Indiana General Assembly, which saw online gambling bills die in committee on Jan. 25.

That makes it the state with the 14th-shortest sessions. For comparison, the Utah State Legislature comes in dead last, meeting just 45 days a year. (See chart below).

Indiana lawmakers rank four spots higher than Texas, because lawmakers meet for four months per odd-numbered year and 2.5 months on even-numbered years, like 2022.

Meanwhile, Hoosiers have been able to bet online on sports since October 2019.

Short legislative sessions have a way of killing online gambling bills, at least the more ambitious ones. Except for West Virginia, all states with full online gambling are among the ones with longer sessions. When it comes to sports betting, the shorter a state’s sessions, the more likely it is to be retail-only, if it has legalized it at all.

So even if O’Rourke’s victory comes to pass and he pushes for legalization, Texas could still be many years away from launching iGaming. However, it even being a possibility is a change from the current situation in which it’s not even on the radar.

Texas is among the states with the shortest legislative sessions

Data: Legiscan / Graph: Online Poker Report

- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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