Texas gears up for 2023 legalized online sports betting battle

Legislators, with the backing of the Texas Sports Betting Alliance, have filed Bill SB 715 and companion HB 1942 attempting to legalize Texas online sports betting. 

Who’s in the Texas Sports Betting Alliance?

The bills were filed by Sen. Lois Kolkhorst and Rep. Jeff Leach. The Texas Sports Betting Alliance includes the following teams, betting platforms and racetracks: 

The same Alliance backed similar bills in 2021 but made little progress in the Lone Star State which has, to date, remained vehemently anti-sports betting despite growing pressure from team owners and lobbyists. 

Under the proposals, an application fee would cost $500,000 and the tax rate levied on proceeds from sports betting would be 10%. There is also text surrounding promotional credit deductions and carry over of revenue to be offset against future profits; all very favorable for operators. 

Rep. Jeff Leach stated: “I am proud to partner with Senator Kolkhorst in filing this important legislation. It will serve to promote freedom and liberty in Texas and protect our citizens from the illegal and increasingly dangerous sports betting market that preys on unsuspecting consumers, including minors, putting their personal and financial information at great risk.”

What’s the process for legalizing TX sports betting?

In order for legal sports betting to come to Texas, the above bills would need to pass through the Senate and House with a two thirds majority, garner the approval of Gov. Greg Abott and then, arguably the biggest hurdle with a majority positive vote from TX residents before the laws can then be drafted and put into effect. Realistically, it’s still but a distant dream.

Given the Texas Legislature meets in odd-numbered years, failure to legalize during this year will mean a minimum wait until 2025. Those advocating for TX online casino will have even longer to wait, given there are very few examples of where iGaming comes before sports betting has been legalized for a while at least.

Some would suggest that the bid for legalized sports betting in California in 2022 may be representative of how Texas’ 2023 bid goes. The operators and advocates for sports betting spent record amounts lobbying for the Prop, which tribes were vehemently against. In the end, come the ballot in November, the Prop was defeated by a remarkable percentage, with over 80% voting against. 

What did the polls say?

Others, however, would point to the Dallas Morning News survey conducted in 2021 which actually showed a broad support for gambling within the polls. 

When asked “Would you support or oppose allowing casino gambling in Texas?”:

• 57% Support
• 29% Oppose
• 13% Doesn’t matter to me

“Would expanding gambling to Texas help the overall state economy?” 

• 31% A great deal
• 34% A fair amount
• 13% Not too much
• 9% Not at all
• 14% Don’t know

“Currently, sports betting is only allowed on horse racing at licensed tracks in Texas. Would you support or oppose a Texas law to legalize sports betting on sporting events?”

• 43% Support
• 26% Oppose
• 31% Doesn’t matter to me

Should these poll figures be indicative, then should the legislation go to ballot there’s a chance that it would be voted through. What’s guaranteed, however, is a huge advertising war between those in favor and those against, as shown by the record marketing spend in California. Should the 31% who are on the fence for sports betting be convinced one way or the other, the pendulum could easily swing. 

Texas is the second most populous state in the United States of America, sitting behind only California. There’s little surprise that commercial operators and sports teams are advocates of sports betting given the revenue that’s been proven elsewhere since the repeal of PASPA. 

Should Texas legalize, it may well pave the way for legal sports betting in California, or legal sports wagering in Oklahoma, just 2 of the states where operators are eagerly awaiting legislative change.