Commercial casino and mobile sports betting have yet to crack the highly populated market that is Texas. Despite renewed optimism during this legislative session from proponents of each, Texas lawmakers weren’t having it, putting up a united front to keep additional gambling expansion off the books.
As a result, it will be at least three years until the topic officially comes up again, effectively delaying meaningful reform until at least 2028. Many industry stakeholders are now recalibrating their long-term strategies as they await another shot when the legislature reconvenes on the issue in a future session.
Texas Lottery in Jeopardy
The state Senate voted to end the Texas Lottery Commission and to place it under a separate entity. The House has not yet voted on the bill, but if passed, it could signal the end of the lottery in Texas and act as a clear bellwether as to how gambling legislation will go in the future. Some see the Senate’s move as a harbinger of further resistance to gambling, while others believe it leaves the door cracked for future debate on managing gaming revenue more efficiently.
The Texas Lottery has been in operation since 1992 and has become the fourth highest-grossing lottery in the nation behind New York, Florida, and California, producing north of $35 billion in revenue for state education and veteran benefits. Of the 45 states that have a lottery, none of them have ever moved to shut down this lucrative revenue stream. Texas would be the first to do so if it passes legislation to terminate the Texas Lottery, underscoring just how contentious gaming policy has become in the Lone Star State.
The move to shutter the Texas Lottery Commission comes after a syndicate used DraftKings-owned Jackpocket, a lottery courier service, to buy enough tickets to effectively guarantee they had every combination to win the grand prize. Following this scandal, Jackpocket has terminated its operation in Texas, and the lottery commissioner subsequently resigned, leaving questions about oversight and the future regulatory landscape for state-run gaming programs.
Casino Efforts Remain Stalled
After making impressive strides in 2023, gaming companies like the Las Vegas Sands spent millions of dollars on campaign donations to back pro-gambling legislators and have spent a significant amount on advertisements espousing the benefits of gaming in the Lone Star State but have seen their efforts rebuffed during this session. The resistance faced by commercial casino backers has highlighted the persistent influence of anti-gambling advocates and conservative lawmakers.
None of the gambling bills were even heard during this session, and because the legislature meets in odd years and requires voter approval in even years, the earliest change could come in 2028. However, the recent scandal involving the lottery didn’t help, and those new legislators who have been voted in are largely conservative and anti-gambling. Observers say this combination of timing and turnover created a political climate inhospitable to gaming innovation, at least for now.
Nevertheless, the gaming companies and their lobbyists appear to be in it for the long haul and are undeterred by this most recent setback. The state’s burgeoning population and proven appetite for betting means stakeholders are willing to keep fighting, eyeing the next window of opportunity.
Andy Abboud, a senior vice president at Sands, said in a prepared statement, “We’re happy with the progress we made this session. We have always said this will be a marathon, and we still strongly believe that destination resorts coming to Texas is inevitable, which is why we’re not going anywhere.”
The Texas Sports Betting Alliance, the lobbying group that includes the state’s professional teams in favor of mobile sports wagering, is not giving up its efforts in Texas either. Advocates plan to continue outreach and education campaigns, believing that public sentiment is increasingly on their side even if lawmakers remain hesitant.
“We’re disappointed Texans didn’t get the chance to vote to legalize sports betting this year, but we know it’s a marathon, not a sprint,” said Karina Kling, a spokesperson for the Sport Betting Alliance. “The fact is, Texans are already doing this, but through illegal, offshore operators. We’ll keep working to educate people on how legalizing sports betting in Texas would protect consumers and bring financial benefits to the state.”
Republican political consultant Vinny Minchillo understands why the pro-gaming groups are not folding up their tents in Texas because they know that they have the support of the people.
“If gambling got on the ballot as a constitutional amendment, it passes with no problem,” Minchillo said, reflecting the optimism advocates continue to hold for the long-term prospect of legalizing casinos or sports betting in Texas.
