Gambling proponents have a new plan to ask Texas voters to legalize casinos

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Advocates for legalizing casinos in Texas unveiled new legislation Friday that makes a stronger effort to partner with horse-racing operators throughout the state — a retooled approach after their 2021 push came up short.

State Rep. Charlie Geren, R-Fort Worth, filed House Joint Resolution 97, which would let voters decide in the November election if they want to legalize casinos. If approved, gaming companies could apply for licenses to build seven high-end “destination resorts” across Texas, including two in the Dallas-Fort Worth area and two in the Houston area.

Geren’s legislation has the backing of Las Vegas Sands, the gaming empire that first came to Austin two years ago with a high-profile push to legalize casinos. Despite hiring an army of lobbyists and running millions of dollars of TV ads, Sands did not get far at the Capitol, with its bill receiving only a committee hearing in the House.

Now, Sands is back with a proposal that aims to get more buy-in from racetrack operators, which are influential given that they already have a foothold in Texas. The 2021 legislation would have allowed the operators to apply for second-tier licenses for “limited casino gaming.” The new proposal puts them on equal footing with everyone else, getting rid of the tiered licensing and letting them bid to build the full-blown destination resorts.

“It brings everyone together, by and large, that in some ways were divided last time. We have a much broader coalition of people behind this,” Andy Abboud, Sands’ senior vice president of government relations, said in an interview.

Abboud added that the new proposal could “really revitalize the thoroughbred horse-racing industry in Texas,” stimulating not only the tourism industry but also agriculture through increased breeding.

In one promising sign for Sands on Friday, the Chickasaw Nation, which owns a racetrack outside Dallas, released a statement expressing openness to the casino proposal. The Oklahoma-based Native American tribe said that it looks “forward to engaging with [the] Legislature about the economic benefits and tens of thousands of jobs destination resorts will bring to the Lone Star State.”

To be sure, the landscape for expanded gambling at the Legislature remains dicey. While Gov. Greg Abbott and state House Speaker Dade Phelan have increasingly warmed to it, the state’s other top leader — Lt. Gov. Dan Patrick — has continued to throw cold water on it. And the advocates for casino legalization are up against another faction that wants to legalize sports betting, a less ambitious expansion of gaming.

The Sands-backed bill from 2021 would have additionally legalized sports betting, as would the proposal that Geren filed Friday.

Geren is a powerful veteran of the House who chairs the Local and Consent Calendars Committee. While he was not the primary author of the casino bill during the last session — that was Rep. John Kuempel, R-Seguin — he co-authored it and spoke on behalf of Kuempel at a committee hearing on the legislation. Kuempel is expected to remain involved in the casino push this session.

In the Senate, state Sen. Carol Alvarado, D-Houston, has refiled the casino legislation that Sands supported in 2021. But given the new approach that the House legislation takes, it appears doubtful Sands will push for Alvarado’s proposal as currently written.

Partnering with racetracks

Geren’s legislation takes a new approach by seeking to forge more of a partnership with gaming operators who have already planted their flags in Texas, chiefly horse-racing tracks.

Texas has had legalized wagering on horse and dog racing since 1987, when voters approved it in a referendum. There were four active racetracks in Texas last year, according to the state’s Racing Commission: Lone Star Park in Grand Prairie, Sam Houston Park in Houston, Retama Park outside San Antonio and the Gillespie County Fair in the Hill Country. There were five other racetracks that were inactive in 2022, all but one in South Texas.

The proposed resolution would let any racetrack that was licensed as of Jan. 1, 2022, apply for a separate license to construct a casino, either at its current site or elsewhere in its metropolitan area. A racetrack could also "designate" a person to apply for a casino license, allowing for an operator that is newer to Texas to join the bidding competition.

Under the 2021 proposal, racetracks received only the opportunity to apply for “limited casino gaming,” which was defined as a facility with no more than “750 gaming positions, of which not more than 25 percent may be at table games.”

The new proposal also accommodates the racetracks more by expanding the number of “destination resorts” it envisions from four to seven. That is mainly because the latest legislation allows for two resorts each in the Houston and Dallas areas, compared with one each in the 2021 bill. This way, both an existing racetrack operator in the area and an outside company could build casinos in the area.

One similarity to the 2021 bill is that applicants for casino licenses would still have to commit to a minimum investment to build their casinos based on the metropolitan area. It would be at least $2 billion for the Houston and Dallas areas, at least $1 billion for the San Antonio area, and at least $250 million for the Corpus Christi and McAllen areas.

In another new appeal to racetracks, Geren’s legislation would impose a 15% tax on gross casino revenue and divert an unspecified portion of it to serve as prize money for horse racing. That would “promote the growth and sustainability of the horse-racing industry in this state,” according to the legislation.

The Sands team believes that the new emphasis on horse racing gives it a stronger case to make to rural lawmakers.

“It has much larger tentacles,” Abboud said. “It’s not just massive development in urban areas. … It could make Texas one of the No. 1 horse-racing industries in the country.”

More broadly, Abboud said he was “encouraged” by the political landscape for expanding gambling this session. He said he believed lawmakers are “becoming more comfortable” with the notion of letting voters decide the issue, and he noted that Abbott and Phelan have been expressing more openness. As for Patrick, Abboud said he did not see him as being a hard no but as wanting to see a demonstration of broad support.

“We’ll always take a maybe over a no,” Abboud said.

Disclosure: Las Vegas Sands Corp. has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.