Lobbyists Cautious Over 2023 Sports-Betting Prospects In Texas, Minnesota

November 14, 2022
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The 2022 U.S. midterm elections are over, and although there were several outcomes on the state level that surprised political observers, the effort to legalize sports betting in Minnesota and Texas remains questionable next year.

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The 2022 U.S. midterm elections are over, and although there were several outcomes on the state level that surprised political observers, the effort to legalize sports betting in Minnesota and Texas remains questionable next year.

Only three states — Massachusetts, Maine and Kansas — passed legislation to regulate sports wagering this year, versus ten in 2022, and lobbyists believe further expansion in 2023 will hinge on gaining the support of tribal casino operators in Minnesota and overcoming conservative opposition to gaming in Texas.

“There was a big change in Minnesota,” Brent Iden, vice president of government affairs with Fanatics Betting & Gaming, said Thursday (November 10) during a webinar on the midterm elections and what they mean for the gaming industry hosted by iGaming Business.

“I want to highlight that because we were probably looking at divided government. We now see the Democrats control every chamber there and Democrats have a great relationship with the tribes.”

Democrats defied expectations in Minnesota in last week's election to gain control of the legislature, by retaining a majority in the House of Representatives and seizing the Senate from Republicans.

The results put Democrats in complete control of any sports-betting legislation that is introduced next year.

In another significant development, Republican Senator Roger Chamberlain, who has tried to pass a bill for the past three years and came close this year, was defeated by Democrat Heather Gustafson.

Even without Chamberlain, a sports-betting bill has a chance of being passed in 2023. Both Democrats and Republicans support tribal operated in person and mobile sports betting under legislation passed by the House earlier this year.

“The bill got very close last session,” Iden said. “I think we are going to see a more tribal-friendly bill in Minnesota. That is what we are probably going to see.”

What derailed the effort in the Senate was language that would have allowed the state’s two racetracks to allow sports betting alongside the state’s tribal casinos.

The decision to include the racetracks was opposed by the Minnesota Indian Gaming Association (MIGA) and Governor Tim Walz, a Democrat. The 11 tribes in Minnesota operate 40 casinos.

Andy Platto, MIGA’s executive director, said Friday he was “unable to comment at this time” on how a Democratic take over of the state legislature would affect efforts to legalize sports betting.

Beyond Minnesota, in other states such as Oklahoma, Georgia, Alabama, North Carolina and Texas, nothing has really changed in the aftermath of the 2022 midterm elections, Iden said.

“What I do like is that the elections are now over,” he added. “It’s always difficult to have conversations [about] gaming when it is an election year. Now we can go in and say it’s over, the lines have been drawn, we know where everyone stands, let’s move the messaging forward.”

Stacie Stern, vice president of government affairs and partnerships with Underdog Fantasy, agreed, saying now is the time to get “boots on the ground and have conversations with stakeholders and legislators, which will be key to moving our issue forward.”

Lobbyists Cautious Texas Will Embrace Gaming

Despite support for legalizing gaming in the Lone Star State by Democratic gubernatorial candidate Beto O’Rourke, it was not a big enough issue as his campaign came up short last week in unseating Republican Governor Gregg Abbott.

John Pappas, founder and CEO of Corridor Consulting in Washington, D.C., said it has been difficult to garner enough support for legalizing sports betting in Texas, especially as lawmakers, some of whom were seeking a final term, were more concerned with the 2022 elections.

“I think a lawmaker in their last term may take a more pragmatic approach to the issues like gaming,” Pappas said. “Hopefully, things like that will help catapult legislation this year.”

Brendan Bussmann, managing partner of the Las Vegas-based consultancy B Global who moderated the hour-long webinar, reminded attendees that the Texas legislature meets only in odd years, so “we get one shot, or we have to wait two years.”

Pappas expressed some optimism on Texas passing a sports-betting or land-based casino bill following a recent signal sent by Governor Abbott that he is open to concepts allowing for entertainment centers, which would include land-based casinos.

“You have the support of very influential people like [Dallas Cowboys owner] Jerry Jones, [Houston Rockets and Golden Nugget boss] Tillman Fertitta and others who are sports team owners that are pushing for this,” Pappas said. “I think that makes it very attractive for casino gaming. I think if that wasn’t in the picture, then sports betting would have broad support among lawmakers as a standalone.”

Pappas said it was a question about whether these two issues will be married into a single package or will they run independently and be joined together at some point.

“I think it will be a political calculus between now and April to determine whether or not that is possible,” he added.

Stern questioned whether Abbott’s support for of land-based gaming was real.

“I’m not positive that is how his staff really feels or that was to appease donors,” Stern said. “I would like to dig into that a little bit. We still have a lot to learn about Republican Lieutenant Governor Dan Patrick.”

Patrick, who also serves as Senate president, has been opposed to legalizing gaming in Texas.

“With regards to gaming, remember Texas is a state where we don’t have fantasy sports clarified and legal,” she added. “We’ve tried over the years and have not been successful in getting a hearing in the Senate. My sense is sports betting alone without casinos or entertainment districts has probably the best shot.”

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