Texas think tank warns of expanding gambling amid increased lobbying activity

As casino companies build up their lobbyist armies in Austin ahead of next week’s legislative session, key figures in Republican politics are warning of the potential social harm of expanding gambling in Texas.

The study, released this week by the influential Texas Public Policy Foundation, warns that while expanding casino gambling will provide a new source of tax revenue, it will increase social problems such as gambling addiction, mental illness and crime. There is.

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“Naturally, individuals with ‘problem gambling’ tendencies pose difficult policy questions for legislators: how much human suffering can be tolerated to replenish the national treasury?” “How much?” said Derek M. Cohen, TPPF’s chief research officer.

The warning comes as the gaming industry gains momentum in urging lawmakers to allow online sports betting and casinos. The Texas Constitution specifically prohibits the expansion of gambling, but the industry has found new hope in Texas in 2022 after Abbott said he was open to gambling. The Texas House of Representatives passed a gambling expansion bill the following year, but it fell short of the two-thirds majority needed to amend the constitution. And the biggest hurdle still remains in the Texas Senate, where Lt. Gov. Dan Patrick, who leads the chamber, says there aren’t enough votes to pass it.

That hasn’t stopped state Sen. Carol Alvarado (D-Houston) from introducing a bill this Congress that would open the state to casinos and sports betting. Under her proposal, up to two destination casino resorts would be allowed in Dallas and Houston, and one each in the San Antonio, Corpus Christi and McAllen areas.

Major casino operators already have deep ties to Texas and Republican politics. Tilman Fertitta, a Galveston native whose Landry’s operates Golden Nugget casinos in Las Vegas, Atlantic City and Louisiana, has been one of Abbott’s most important donors over the years. He donated more than $1 million to Mr. Abbott’s 2022 re-election campaign and let Mr. Abbott fly around the state on his private plane. Mr. Fertitta has already donated $450,000 to Mr. Abbott’s 2026 reelection bid. President-elect Donald Trump has announced that Fertitta will be appointed U.S. ambassador to Italy.

Miriam Adelson, majority owner of Las Vegas Sands, also became a major donor to Mr. Abbott and other Texas Republicans. She and her late husband, Sheldon Adelson, donated $1.5 million to Mr. Abbott’s 2022 re-election campaign. Last year, the Las Vegas Sands bought a controlling stake in the Dallas Mavericks and established a political action committee in Texas to push for casino legislation.

Despite the 2023 failure, gambling interests are becoming more aggressive in lobbying against casinos and sports betting in Texas. Las Vegas Sands has 103 lobbyists registered to work in Austin, according to state records. This is up from 74 cases in 2022 and 19 cases four years ago.

Sands is not alone in his rise to prominence in the Texas lobbying corps. Recently formed Sports Betting Alliance, BetMGM, Caesar’s, Boyd Gaming, Landry’s Entertainment and others contribute to approximately 350 Texas lobbyists registered to tackle problem gambling, a 40% increase in just four years I’m doing it.

Former Governor Rick Perry is among those working with the Sports Betting Alliance to at least allow sports betting. He claims that millions of Texans already use offshore sites or travel out of state to participate in sports betting. He said legalizing sports betting would bring revenue back to Texas and protect consumers.

The TPPF report acknowledges that Texas will benefit financially from casinos. They estimated that agreements with casino operators could generate $800 million a year for state and local governments. But Cohen specifically cited the experience in Ohio, where he said studies showed the number of problem gamblers increased dramatically in the 10 years since casinos were allowed in the state.

“There is no denying that the expansion of casino gambling is associated with increased state and local tax revenues,” his report said. “However, this new tax revenue is offset by correlated negative phenomena such as gambling addiction and crime.”

TPPF has a history of influencing Republican lawmakers in Texas.

Gaming officials from around the world claim the report misrepresents the impact of gambling. Dave Forman, head of research at the American Gaming Association, said that despite the proliferation of gaming options over the past few decades, problem gambling remains stable at about 1% to 2% of the population. He said there are reports that show this.

He pointed to a University of Massachusetts Amherst report released last fall that showed casino legalization in Massachusetts did not lead to a significant increase in problem gambling.

Texas has unique hurdles to expanding gambling. The Texas Constitution prohibits the expansion of gambling, so the Legislature must put the issue to a referendum. However, this would require a two-thirds majority in both the House and Senate to pass the bill. This means receiving 21 votes out of the 31 senators.

If all Senate Democrats could convince a few Republicans to join them, they could pass the bill. But Patrick said he would only allow the bill to move forward if the Senate Republican majority agrees.

The Texas Republican Party also opposes gambling, especially the expansion of casinos, in its official platform. Violating this platform could result in public condemnation and the party’s campaign against members who vote for casinos.

The Texas Legislature meets once every two years in a regular session lasting 140 days. Tuesday is the first day of the session, and the session ends on June 2nd. Republicans hold a majority in both houses of Congress.