Texas lawmakers hear gaming pro’s and no’s

The Texas House Licensing and Administrative Procedures Committee recently heard testimony from gambling supporters and foes regarding a bill to create a Texas Gaming Commission that would regulate eight “destination” casinos and eight racinos. The House also is considering more than a dozen other gambling bills that would legalize gaming at casino resorts, racetracks and Native American reservations.

Rep. Carol Alvarado’s bill proposes a constitutional amendment that, in addition to establishing a gaming commission, would require a two-thirds majority in the legislature and a voter referendum on whether to expand gambling in the state. Gaming could help solve the state’s $23-$27 billion budget deficit problem, Alvarado said.

Proponents also said that legalizing gambling in Texas, beyond the state Lottery and horse and dog racing, could bring an additional $1 billion to the state treasury, boost the economy, create thousands of jobs and help close the state's $23-$27 billion budget deficit for the two-year cycle. According to Gambling Compliance, many Texans believe now is the best opportunity to expand gambling in a decade, since many lawmakers were elected on a “no tax increase” platform.

But many legislators disagree. Rep. Lon Burnam said expanding gambling won't affect this year’s budget deficit. “Long-term, it deserves careful consideration. But it takes 100 votes to get an issue to the voters, and no one has come asking for mine,” Burnam said.

Added Rep. Mark Shelton, “If gambling comes to the floor of the House, I will vote no. I just don't think it's in the best long-term interest of the state.”

Over in the Texas Senate, Senator Robert Duncan, chairman of the State Affairs Committee, said, “I just don't think there are the votes in the Senate. A lot of us have strong opposition to using gaming to solve our budget problems. There are a lot of other important measures that we need to take up in committee that have the ability to pass on the floor.” Duncan noted that casino revenues would not be available to help close the estimated $15-$27 billion budget gap for the next two-year cycle, since casino construction and development would take several years.

Lieutenant Governor David Dewhurst, who controls the Texas Senate, noted, “I haven't seen 21 senators say they want a gambling bill brought up.”

The Texas Gaming Association said the plan to create eight destination resort casinos, provide eight licenses for slots at race-tracks and allow casinos on Native American reservations would provide about $1.3 billion in taxes annually and create 40,000 additional jobs. Each casino license would cost $50 million.

“Texas is the largest undeveloped casino market in the United States,” said TGA Chairman Jack Pratt. “We are going to need huge amounts of revenue for years to come. This is a new source of revenue. We think it is an economic development bill, not a budget crisis bill.”

Pratt said Texans spend about $4 billion a year in casinos in Oklahoma, Louisiana, New Mexico and Nevada.

“The bill is so overpowering in what it will do for Texas,” Pratt said. “States, cities, counties will be pressed in years to come.”

However, Mike Lavigne, spokesman for Win for Texas, said TGA opposes his group’s support of slots at tracks. “They are not trying to pass a bill, they're trying to kill our bill,” Lavigne said. “They don't want to see us do it because you see how much money goes to Vegas every year,” referring to the fact that TGA represents Las Vegas Sands Corporation. Win for Texas’ recent report showed slot machines at 13 racetracks would generate more than $3 billion annually in revenue, with about $1 billion going to the state treasury.

Jon Hockenyos, president of TXP consulting firm, which recently completed a study released by Win for Texas, said the study indicated allowing slots at tracks would create 77,000 permanent jobs and generate nearly $800 million in tax revenue over the next two years. The study also showed $2.2 billion of the $2.7 billion Texans spend on gambling in other states would remain in Texas if slots were allowed only at existing racetracks and Indian reservations.

“The state needs money and tax increases are not on the table,” said Bryan Brown, chief executive officer of Retama Park Racetrack near San Antonio.

Tilman Fertitta, chairman, president and chief executive officer of Landry's Inc., which owns the Golden Nugget casinos, said if gambling legislation would pass, he could have a temporary casino up and running in Galveston in a few weeks, then build a permanent facility.

“The billion dollars in tax revenue strictly from the gaming is just a portion of what municipalities, counties and the state of Texas would get from the ripple effect and the ancillary taxes,” Fertitta said. He pointed out that Texas already gamble—in Oklahoma, Louisiana and New Mexico. “Our tax dollars continue to leave,” he said.

Michael Britt, vice president of government affairs for Wynn Resorts, said the company would be interested in spending $1.5 billion to $2 billion on a casino resort in Texas. Britt said the development would create 7,000-8,000 construction jobs and about 10,000 casino jobs. He said the casino alone could raise $500 million in tax revenue; a destination resort could generate $700 million in tax revenue plus $300 million from a hotel, restaurants and retail stores.

The House committee also heard from several gambling opponents, including Suzii Paynter, director of the Texas Baptist Christian Life Commission, who said lawmakers must be wary of promises and revenue estimates made by gambling proponents. She also urged them to consider the potential costs of the new industry, such as addictive gambling. Pat Carlson, president of the conservative Texas Eagle Forum, also testified against the bills. “We, in Texas, like to say we are a family-friendly and business-friendly state,” Carlson said. “There is nothing family-friendly about gambling.” She added, “The very people who should not gamble, do gamble.” Rob Kohler, a consultant with the Texas Baptist Christian Life Commission added, “We don’t think it’s a good idea. The state is better off without it.”

Also speaking in opposition was Juan Garza, Jr., chairman of the Kickapoo Traditional Tribe of Texas, who said expanded gambling would hurt his community, which counts on casino revenues to maintain their federal lands in South Texas. Garza said, “We would not be able to take the competition and our gaming business would be put out of business.” He said if the legislature legalizes casinos, his tribe should be able to move its facility to a more populous region.

Spokespersons for the Tigua Indians of Texas, however, said when their tribal-owned Speaking Rock Casino was open, crime was down and income was up for the tribe and other casino employees. Tribal Councilman Chris Gomez said, “We are in support of any gaming bill that allows us to provide input in the process.”

By Staff