The Effect of This Week’s U.S. Supreme Ct. Gaming Ruling on Texas

posted on 5.14.2018

The U.S. Supreme Court this week struck down a 1992 federal law prohibiting most states to authorize sports betting.  The 6-3 ruling essentially ends Nevada’s near monopoly on betting on professional sports teams and will clear the way for other states to decide whether to allow it.  Will there be any impact on Texas because of the court’s decision?  Attempts to expand gaming opportunities in Texas have fallen short at the Texas Legislature for more than a decade and it’s not likely to change anytime soon.

In 2015, Texas Gov. Greg Abbott and Lt. Gov. Dan Patrick both voiced their opposition to exploratory efforts by the Texas Lottery Commission to examine sports betting and other types of gambling currently prohibited in Texas.  In a strongly worded letter sent to the commission, Abbott wrote “State laws on gaming are to be viewed strictly as prohibitive to any expansion of gambling. This statutory framework is properly intentioned to protect our citizens, and I support it wholeheartedly.”

Legislative attempts to expand gaming opportunities at existing Texas horse and dog racing tracking that allow pari-mutuel wagering have also been stymied at the Legislature.  The proposed expansion was touted to increase state revenue for schools, much the way the Texas Lottery was sold to lawmakers and voters in the 1990s.  But Texas lawmakers have turned up their collective noses at the prospect of casino gaming in Texas, even when the state was hurting for income.

“Casino gaming is not close, and sports betting is farther away than that,” mused Houston Culture Map sports writer Fred Faour on Monday.  “Unless there is a significant culture change, don’t expect sports betting in Texas in the next decade -- or even longer.”  While Texans should not expect in-state wagering on professional sports anytime soon, the opportunities to do such wagering in bordering states is on the horizon.

A 2017 CBS News MoneyWatch report speculated 14 states would offer sports betting on professional teams within two years and many as 32 states would offer it by 2025, including Arkansas, Louisiana, Oklahoma and New Mexico.  A question mark for Texas is whether the Native-American owned casinos in other states will be allowed to offer professional sports wagering.  It’s an important distinction because the 1988 federal Indian Gaming Regulatory Act gave broadcasters authorization to advertise certain games conducted by a tribe on Indian lands.  Without it, the existing Texas law prohibiting advertising of gaming in Texas other than the State Lottery and pari-mutuel wagering at horse and dog tracks would prevail.  That has allowed tribes in Arkansas, Louisiana, Oklahoma and New Mexico to advertise Class III gaming in Texas while privately-held casinos in such states could not advertise their Class III gaming options.  It is unclear at this time whether professional sports wagering will be allowed at tribal-owned casinos.

The IGRA does not speak to the issue and whether it will require a congressional expansion of the Act to allow it is unclear.  If it is allowed, Texas broadcasters could see an uptick of advertising in Texas by Native-American owned facilities hoping to lure Texans to their doors.

Questions?  Contact TAB's Michael Schneider or call (512) 322-9944.

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