“Anytime you open the door to any form of legal gambling, entrepreneurs are going to ram it open and run through.” - Nelson Rose, Law Professor, Whittier Law School.
Legal gaming is coming to Texas. The question in everyone’s mind is when? In 2009, the Texas Legislature reconvenes and will have several video gaming bills waiting for them in committee. Each bill will have its own version of how and where to legalize gaming. First, the Texas Legislature will authorize video gaming machines: video 8-Liners or slot machines, video poker, and video bingo. The proposed legislative bills will restrict these gaming machines to horse tracks and dog tracks, “off-shore casinos”, such as riverboats, and Native American reservations primarily located in West Texas. Eventually table games will be allowed and maybe even full-fledged casinos, but that won’t be for some time.
The best way to predict the future legislative course of legal gaming in Texas is to look at what is going on in other states. For example, in 2007, the Indiana legislature authorized legal gaming at horse tracks. Indiana has only 2 horse tracks, Hoosier Park approximately 40 miles north of Indianapolis and Indianapolis Downs Park approximately 30 miles southeast of Indianapolis. Each track must pay an initial license fee of $250 million, provide $100 million or more in additional construction or capital improvements, and the new slot machine facilities must connect to the racetrack facilities. Indiana is expected to generate close to $500 million in annual revenue within the first 5 years, exclusive of the licensing fee. Indiana will also require an annual $100 license fee for each video gaming machine in use. In a cash strapped state, such as Texas, the Legislature cannot afford to ignore those numbers.
Akin to the 1991 campaign establishing the Texas Lottery, gaming proponents will declare that the tax revenue generated from legal gaming will fund public education. And, just like the Texas Lottery, the proceeds will actually be deferred to the State’s general fund. It will be up to the Texas Legislature to actually determine how much is allotted to education. By 2006, the State of Texas received more than $3.7 billion in lottery ticket sales and only allocated $1 billion to public education.
Opponents to legal gaming will declare the need to protect the moral fabric of Texans. However, a closer examination of such opponents will reveal that casinos located in neighboring states, such as the Oklahoma Chickasaw Nation, are some of the largest campaign contributors to Texas politicians. Oklahoma and Louisiana casinos have good cause to play a major role in Texas politics. Texans make up approximately 80% of Choctaw Casino’s revenue. Similarly, shortly after Texas legalized pari-mutuel betting at horse tracks in 1987, Louisiana Downs, located in the border city of Shreveport, declared bankruptcy. Once gaming is made legal in Texas, there will be no need for Dallasites to drive 100 miles to visit the $60 million plus Winstar Casino in Durant, Oklahoma when they can visit Texas Lone Star Park in neighboring Grand Prairie. And that’s the idea.
One thing is for certain, legal gaming is coming to Texas and soon. Whether a new gambling law will pass in 2009 or 2011 is up for grabs. What is not in dispute is that Texans bet millions of dollars annually in Oklahoma, Louisiana and New Mexico. The Texas Legislature will eventually stop this mass exodus of untapped tax revenue in the name of education, our children and all that is good. For those who have doubts, just follow the money.
Adam W. Vanek
(214) 890-0991
avanek@tiptonjoneslaw.com
