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Texas House Panel Takes Up Bills Legalizing Sports Betting

- Measure Would Set Statewide Vote in November

The House State Affairs Committee today is taking public comment on legislation that would let voters decide whether to legalize sports betting in Texas, activity long opposed by religious groups. The question would be put to a statewide vote amending the state’s constitution this November.

HJR 97 by Rep. Dan Huberty, R-Walden, must be approved by two-thirds of the Texas House and Senate to allow Texas voters to weigh in directly, a high bar that all proposed constitutional amendments must meet. The Governor does not have the authority to veto such proposed amendments.

If approved, Huberty’s HB 2070 – called “enabling legislation” for the proposed constitutional change – would implement a regulatory framework to protect consumers and allow law enforcement to hold bad actors accountable. This bill requires a simple majority support in the House and Senate, and the Governor’s approval.

The option exists because of the U.S. Supreme Court’s 2018 ruling allowing states to reconsider sports betting. To date, 25 states have legalized it, including Arkansas and Louisiana. Legislation is pending in Oklahoma, while New Mexico is operating in a legal gray area.

The Sports Betting Alliance, led by Fanduel, Draftkings, BetMGM, and the state’s professional sports teams, predicts the state could immediately generate as much as $180 million for the state’s current budget and grow as high as $400 million in future years.

The group contends that Texans already are engaging in sports betting, estimating illegal bets totaling $5 billion are placed each year.

While the tax revenue from that activity could be put to good use, the Texas Senate already has approved its version of the state’s next $250 billion two-year spending plan that already balances and still leaves unspent more than $38 billion in federal COVID-19 disaster relief funds.

That weakens sports betting advocates’ immediate economic arguments for the measures, but the state’s continuing rapid growth underscores the need for new revenue eventually, if not now.

It’s far from clear what will happen with this measure, but the cards are stacked against it.  Time is short for any legislation that hasn’t already cleared committees by now to win floor votes.

The fact that Senate companion legislation – SB 736/SJR 39 by Sen. Juan “Chuy” Hinojosa, D-McAllen – hasn’t been heard yet is generally attributed to the aspersions cast on the notion early in the session by the chamber’s leader, Lt. Gov. Dan Patrick.

Neither Gov. Greg Abbott nor House Speaker Dade Phelan is championing this effort, and the religious objections are strong among lawmakers.

Its success likely hinges on the fact that generating a sizable amount of revenue with little effort or expense on an activity that already is widely known to be occurring in the state, is viewed by many as a “no-brainer” for lawmakers who will likely be desperate for revenue in just a few years.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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