The gambling scenario could change in Texas in 2016, in regard to 8-liners, the state lottery, Native American casinos, historic racing machines, daily fantasy sports and casino cruises. However, with a background that includes the Jack Abramoff-Indian casino scandal and crimes attributed to former GTECH national sales director J. David Smith in 2006, Texans are skittish about going too far too fast when it comes to expanded gambling.
Texas law allows 8-liner machines as long as no cash prizes are offered, worth no more than 10 times the cost to play one game and valued at $5 or less. Locally, laws are passed to allow the games and include enforcement guidelines. However, when the games are shut down in one area due to paying “secret” cash prizes, they’re offered in a new, nearby town. According to Expressnews in southern Texas, Kevin W. Benson, special agent in charge of Homeland Security Investigations in Cameron County, said, “When you start seeing a huge cash industry like this with very little accounting, there’s a tremendous amount of flexibility where that money can flow.”
In 2013, the Texas House voted to abolish the lottery and reversed itself the same day. That year, the lottery brought in $1.89 billion. Last year, it delivered to the state $1.58 billion, although Texans spent more than $4.5 billion on the lottery during the 2015 fiscal year. When state lottery commissioners started seeking ways to stop declining revenues, Governor Greg Abbott directed them not to consider sports betting or daily fantasy sports. In a letter, Abbot wrote, “Please ensure this intent and direction is strictly enforced among the staff of the Texas Lottery Commission. Please also notify the executive director and staff that any request to travel to gather information about gaming opportunities that are prohibited in Texas should be denied.”
In addition, state Attorney General Ken Paxton recently issued a nonbinding opinion stating, “Odds are favorable that a court would conclude that participation in daily fantasy sports leagues is illegal gambling.” Under Texas law, the courts, not the attorney general, decide if an activity is legal. DraftKings attorney Randy Mastro said, “We strongly disagree with the attorney general’s prediction about what the courts may or may not do if ever presented with the issue of whether daily fantasy sports are legal under Texas law. The Texas legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill. The attorney general’s prediction is predicated on a fundamental misunderstanding of DFS. We intend to continue to operate openly and transparently in Texas, so that the millions of Texans who are fantasy sports fans can continue to enjoy the contests they love.”
Recently National Indian Gaming Commission Chairman Jonodev Chaudhuri ruled that the Alabama-Coushatta and Tigua tribes may offer gaming on their reservations. The Tiguas requested the state attorney general’s office lift a 2001 court-ordered injunction on gambling, but on January 12, representatives from the office filed papers opposing the tribe’s request, referencing federally recognized law blocking gambling on the tribes’ lands. Meanwhile, Texans can gamble at the Kickapoo Tribe’s Lucky Eagle or board a casino cruise at Aransas Pass, where the Aransas Queen Casino made its maiden voyage in May. The Pride of Texas, also expected to operate out of Aransas Pass, still has not announced its debut.
The battle over historic racing machines likely will heat up at the end of February when temporary funding of the Texas Racing Commission will run out. After commissioners voted to pass regulations allowing the machines at Texas racetracks, legislators, who stated commissioners overstepped their authority, defunded the commission, which resulted in a one-day shutdown of all Texas racetracks in September. In December, lawmakers granted the commission only enough funding to last through next month. If the racing commission again refuses to repeal the racing machine regulations, Abbott could replace commissioners with others who will follow his orders. Meanwhile the Texas Horsemen’s Partnership filed a lawsuit against the state comptroller over the administration of funding for the commission.
