Gambling in Texas

By Oliver Ramsey

With Texas collecting less revenue, $18 billion less, than the previous budgetary cycle, gambling advocates are once again selling what they consider a cure to Texas’ budgetary woes – legalized casino gambling. Casinos in Texas though?  I wouldn’t bet on it.

Governor Rick Perry who is now getting more national attention and allegedly has higher political aspirations will want to showcase Texas before the entire nation.  Perry will put his words – “Cut the taxes, Cut the spending” – into action next session.  He has done it once before in 2003, and if elected again, will do it again in 2011. He will be closely watched by some of his base of social conservatives who oppose gambling.  If Perry is going to move up he is going to need the continued steadfast support of these social conservatives.

If you are betting on a different governor to increase the odds of passing some sort of casino legislation you will still end up losing.  Democratic gubernatorial candidate Bill White opposes the expansion of gambling.  

The Legislature itself will remain a largely conservative body.  The Texas Senate will remain solidly Republican, and the Texas House of Representatives will remain Republican.

Now that we know the players, let’s meet the dealers: casino destination-location developers, racetracks, and Indian tribes.  None of them agree or really like one another, and they all tend to exaggerate the odds of Texas winning.

The casino destination-location developers promise billions of dollars generated and thousands of jobs created.  They want to create Las Vegas-style casinos in Texas in order shore up Texas convention business and real estate.  The problem is that it will take probably two years to build those 1000-room hotels.  This does not take into account the time it will take for a casino to receive regulatory approval from a brand new state agency.  Money will not be coming to the state for a few years.  Never mind the fact banks are probably going to be reluctant to lend a couple billion dollars for Las Vegas-style casinos in Texas in this economy.

This now brings us to the racetracks that want to build casinos, or “racinos”, on their existing premises. These racetracks, which are located in or near Dallas, Houston and San Antonio, do not want to compete with a MGM-Dallas, an Excalibur Houston, or a Sands San Antonio.  The racetracks, like the developers, gloat about the potential economic impact to the state, but the racetracks go one step further suggest they will be more profitable and their projects much more feasible than the developers.   The developers respond that their billion dollar investments will do more for the economy.  The infighting starts, but it does not stop there.

There are 3 Indian tribes in Texas none of which agree with each other on what to do to improve their odds of expanding or reopening their casinos.  In El Paso, the Ysleta del Sur Pueblo wants to reopen its casino without any regulatory oversight.  It wants to regulate itself, which is a hard sale to make to a conservative legislative body.  Out in East Texas, the Alabama-Coushatta Tribe of Texas does not mind regulatory oversight.  The Kickapoo Traditional Tribe of Texas, which has a limited gaming casino regulated by the federal government, wants to have a full-blown gaming casino regardless of the position of the other two tribes. The revenue these tribes would share with state would be a drop in an $18 billion bucket.  As a result of the paltry sum of revenue the tribes would generate, their legislative fate is tied to the racetracks and developers.

With squabbling among the dealers, and resistance from the major players, Texans should not bet their fortunes on casino gambling.

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