It’s starting to look like 2023 could be the year that Texas passes an online sports betting bill. The latest effort by Sen. Lois Kolkhorst seems like the state’s best shot to date. It may also bode well for the long-term potential to see other forms of online gambling in the state. Even if the legislation passes, however, it will require a referendum to become law.
The Lone Star State has tried and failed to legalize sports betting before. In fact, there was already one such bill in the legislature this year. What sets the latest legislation apart from its predecessors is its author. Kolkhorst is a prominent Republican, which could help reduce opposition from other members of her party.
Partisanship has been a major impediment to gambling expansion in Texas, as in other states. A recent study by the University of Houston found that a majority of Texans would like to see sports betting become legal. However, Democrats led the last major push in 2021, while Republicans have controlled both halves of the legislature since 2003.
Notably, Lt. Gov. Dan Patrick, who is also the Senate President, opposed that effort. Kolkhorst is not only in the same party as Patrick but a close political ally, which could help sway him. Further helping matters is the fact that Gov. Greg Abbott has indicated his openness to the idea.
Similar to 2021 Bill, but Mobile Only
Kolkhorst’s proposal is very similar to the 2021 legislation and includes the same 10% tax on sports betting revenue. One significant difference is the removal of the retail sports betting component. Under Kolkhorst’s plan, Texas would be an online-only sports betting state, similar to Tennessee.
Even if this effort succeeds, the possibility of Texas online casinos is surely still many years off. However, this is a significant momentum shift.
Texas’s population makes it a big prize. If and when online sports betting comes to the state, we can expect further online gambling expansion to become an important topic of conversation, as it has been in New York since mobile betting made its debut last year.
Gambling Expansion in Texas Requires a Referendum
Online sports betting legalization still has a long road ahead of it in Texas. It’s one of many states whose constitution includes a blanket ban on gambling. Authorizing any new form of wagering requires an amendment.
That means the bill will need a two-thirds supermajority in both the Senate and the House. Then, Texas voters would get their say. Joint Resolution 39 would create a ballot measure asking Texans whether they approve of the amendment.
The University of Houston study offers good news in that regard. If its findings reflect the way the vote would go, then such a referendum should pass easily. Helping matters further is the possibility that proceeds from sports betting could go to mitigate property taxes, which have been a concern for many state residents.
With partisanship now less of an issue, the biggest obstacle may be other gambling expansion bills. There are currently multiple bills in the House and Senate relating to proposals to build retail resort-style casinos in the state. Although these also reflect changing attitudes towards gambling, there’s the risk that some lawmakers will see it as too much, too quickly.
If it starts to seem like there isn’t enough political will for both expansion efforts to succeed, proponents of one could start to become opponents of the other. That’s a problem we’ve seen in other states at times: Competing proposals for expanded gambling can sometimes end up canceling each other out.
Open-Mindedness Towards Online Gambling
So, what about online casinos? On paper, Texas looks like an extreme longshot to consider them. Every other state to have legalized them has done so as an extension of an existing retail casino market. Texas lacks that, having only three tribal casinos, which are limited to Class II gaming (i.e., bingo and related games, including slots-like “electronic bingo” machines).
Even if the current retail casino effort succeeds, construction will take years. It seems unlikely, then, that Texas could see a New Jersey-style online casino market before 2030 or so.
Although conservative about gambling in broad strokes, Texas doesn’t seem to have other states’ aversion to taking it online. Kolkhorst’s decision to take retail sports betting off the table and push for online-only is only the most recent example of that.
Texas is actually far ahead of the curve when it comes to online lottery courier services like Jackpocket or, most recently, Jackpot.com. These take orders over the internet and buy tickets on players’ behalf. Texas has been so accepting of such services that it has become the standard launchpad for new lottery couriers, much as New Jersey is for online casinos.
We’ve seen the same tendency with daily fantasy sports as well. Although Texas has never formally legalized such products, it hasn’t cracked down on them either. More importantly, House Representatives have consistently supported DFS despite a non-binding opinion from Attorney General Ken Paxton that the games are illegal.
So, while online casinos would be a big lift for Texas, it’s a different sort of challenge than we see elsewhere. Typically, “online” is the sticking point. That might not be a big deal in Texas if the “casino” part proves palatable.