The Texas legislature will consider a bill that would amend the state’s constitution to legalize casinos at a limited number of locations and set the stage to permit sports betting.
The proposed law – Senate Joint Resolution 17 – would devise the framework for a new body named the Texas Gaming Commission, which would supervise legalized gambling in Texas.
Casino gambling would be authorized at a “limited number of destination resorts and facilities” with the proceeds going towards tax relief and funding for education and public safety.
The amendment’s author is Houston-based state senator Carol Alvarado, a Democrat who initially pre-filed the bill on 14 November 2022.
Regulatory regime
While the text of the bill does not mention license fees, the number and types of licenses themselves are included.
According to the Senate Joint Resolution, up to four destination resorts in metropolitan areas can apply for Class I licenses – provided that the city has a population of two million or more, and that it does not already have a licensed Class I casino operator already active.
Three Class II licenses to conduct “limited casino gambling” will be available for horse racing operators within major metropolitan areas, who previously held an existing pari-mutual wagering license.
Two additional Class III licenses for limited gambling will also be made available with the same caveats for operators of greyhound racing tracks.
While tribal entities may already offer casino gambling under existing Federal law and jurisprudence, the state amendment would additionally require that Indian casinos pay a portion of revenue in taxation to the state.
According to the bill, tribal operators must have an effective gaming agreement, or obey state law in additional to Federal laws, in order to achieve this.
Casino taxation will be set at 10% of gross gaming revenue (GGR) from table games and 25% of GGR received from slot machines.
Constitutional amendment
The Texas constitution has prohibited gaming for the majority of the state’s history, meaning that a constitutional amendment is required to authorize gaming.
This complicates the legislative process, as two thirds of both chambers, and majority of those polled in a referendum would be needed to vote for Alvarado’s proposed law.
Currently, casino gambling is limited to three tribally operated casinos. The Kickapoo Traditional Tribe of Texas runs the Kickapoo Lucky Eagle Casino in Eagle Pass, the Alabama-Coushatta Tribe operates Naskila Gaming in Livingston and the Tigua tribe of the Ysleta del Sur Pueblo has the Speaking Rock Entertainment Center in El Paso.
At present both the state house and senate are controlled by the Republican party, so Alvarado would need bipartisan support to see the proposed law pass.
The amendment would also reform the constitution to allow for the legislating of sports betting at a later date via the normal legislative process, with a simple rather than supermajority of both chambers.
Previous efforts
This is not the first time that a bill has been introduced aiming to legalize gaming activities. In 2021, Democrat Harold Dutton Jr. introduced House Bill 1121 that sought authorize online sports betting.
While the bill was referred to the House Committee, the proposed law was not ultimately successful.