Analysis: Why Texas Sports Betting Will (And Will Not) Happen In 2023 – Legal Sports Report

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Some in the sports betting industry are encouraged by the Republican-backed, standalone online Texas sports betting bill released two weeks ago.

Still, whether the Lone Star State will enact legal online TX sports betting this year remains to be seen. 

“I appreciate the pressures and the hurdles we have to work through,” industry lobbyist Bill Pascrell III recently told LSR. “I’d give it a 60-40 chance of getting done this year.” 

If not, with alternate-year state legislative sessions, the wait will continue until at least 2025

LSR breaks down where things stand as March begins. 

Why Texas sports betting will happen

Governor, Lt. Governor might come around

Lt. Gov. Dan Patrick has thrown cold water on expanded gambling efforts before. The Senate president is considered arguably the biggest potential stumbling block in the process. 

Yet, bill sponsor Sen. Lois Kolkhorst is considered an ally of Patrick, as earlier reported by the Texas Tribune,

Additionally, ex-Gov. Rick Perry, who joined the Texas Sports Betting Alliance, is reportedly a close friend of Patrick. 

Patrick mum thus far

Patrick has been mostly quiet on the topic. He has not gone as far as to endorse TX sports betting by any means, but he has not shot it down either. 

“I think he’s getting smart around it, and I think he’s a critical and important factor toward this moving along,” Pascrell said. 

Given that the gubernatorial election is over, Patrick also does not have to worry about re-election should he publicly change his previous stance.  One industry source told LSR in January that Patrick will need to provide a “clear signal” that it needs to move this year.

“Otherwise you’re going to have a legislature that is not interested in pursuing something that isn’t blessed by the Lieutenant Governor,” the source said. “I think more work needs to be done to get a firm commitment.”

Abbott open to Texas sportsbooks

Gov. Greg Abbott told the USA Today Network last week that he does not plan to stand in the way of sports betting legislation.

“It’s really just a form of entertainment,” Abbott said. “And so it depends on how it’s constructed. And we’ll see how far it can advance in the House and Senate.”

Powerful sports team owners want it 

Sports owners in the Lone Star State obviously have financial incentive to make this happen. They will be able to increase their cash flows via market-access deals with online sportsbook operators, as they likely would be the brokers for licenses.

Dallas Cowboys owner Jerry Jones has been vocal about wanting online sports betting. 

“I think it’s really a thing that needs to be addressed at this time,” Jones told a Texas radio station in January

Fertitta on-board as well?

Perhaps, even more importantly, so has Houston Rockets owner Tilman Fertitta. Fertitta is thought to have Patrick’s ear, sources said. 

“The added bonus was the (Tilman) Fertitta quote,” one industry source told LSR when asked about the Republican-backed standalone legislation.

Here’s what Fertitta said via statement: 

“Sports betting is a very popular form of entertainment. Sports fans enjoy placing bets on their favorite sports because it brings them closer to the team and puts them in the game. No one wins with an illegal market as robust as the one in Texas and I applaud Senator Kolkhorst and Representative Leach for recognizing the need to address the illegal market in Texas.”

The 12 pro teams in the state, in addition to the PGA Tour and a pair of racetracks, would be eligible for one license each. The industry prefers the bill’s 10% tax rate, which should align well with tax-averse Texas legislators.

Texans want expanded gambling

A poll conducted by the University of Houston showed that 75% of Texans backed a proposed bill by Sen. Carol Alvarado that would legalize sports betting while allowing for the addition of up to four casino resorts, according to the Dallas Morning News

The standalone sports betting bill proposes an amendment to the state constitution, and therefore requires a two-thirds vote in both the Senate and House before advancing to a public vote on Nov. 7. It would then need to pass by simple majority to be enacted. 

Why Texas sports betting will not happen 

Patrick has not said yes to sports betting in Texas

All the Lieutenant Governor has said so far: 

“I haven’t had anyone mention it to me, that they are interested in doing anything,” Patrick told an Austin TV station of expanded gambling in January. “A lot of talk out there, but I don’t see any movement on it.” 

Despite industry rumblings that he would endorse it, the bill’s future prospects could remain in limbo until he actually does. 

Conflicting interests with casinos

In early February, Rep. Charlie Geren (R-Fort Worth) introduced a casino bill. It is backed by Las Vegas Sands, and would allow for up to seven high-end resorts in the state.

Sands has thrown massive lobbying spend around trying to move its efforts along. The DMN reported Sands has at least 63 lobbyists in the Lone Star State, and will pay them at least $5.9 million this year. 

While operating on parallel tracks, a source told LSR that Sands will not permit a standalone sports betting bill. 

“I believe that the core bill that’s been backed and worked on by the professional teams is the most likely pathway forward,” Pascrell said. “We don’t have a brick-and-mortar casino industry at all in Texas. And so I think the Sands legislation has a little bit more of a challenge. I support it, but I think politically it’s got a higher challenge.” 

Cuban mum on online Texas sports betting

Dallas Mavericks owner Mark Cuban told the DMN that he would like to partner with Sands to build a casino next to his team’s future new arena. 

Cuban and Dallas Stars owner Tom Gaglardi were the major sports owners who did not have statements in a release from the SBA lobbying group when the bill was filed. 

“I’m personally not sure about bricks and mortar and how I feel about that,” Gaglardi said previously. “It feels like that might be a stretch for Texas at this stage. I do think that online gambling is already here.

Asked for his thoughts on the online sports betting bill, Cuban told LSR via email, “I’ll pass, but thanks.” 

Could Texas pass the casino legislation and not the standalone online sports betting bill? “No chance in hell,” one industry source opined. 

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