Texas Sports-Betting Bill Passes House, But Senate Approval Unlikely

May 12, 2023
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Texas took a giant step toward eventually legalizing sports betting on Thursday when the state’s House of Representatives narrowly approved a constitutional resolution to allow online wagering.

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Texas took a giant step toward eventually legalizing sports betting on Thursday (May 11) when the state’s House of Representatives narrowly approved a constitutional resolution to allow online wagering.

Sports-betting advocates in the House needed 100 votes from 150 members to send sports-betting legislation to the Texas Senate because state law requires a two-thirds majority vote from both chambers to put a referendum on the ballot to amend the Texas Constitution.

The final vote on Thursday for House Joint Resolution 102 was 101-42.

As the House floor buzzed with activity in the final moments before the vote, the bill’s sponsor, Republican Jeff Leach, implored his colleagues to support his measure, claiming it would provide nearly $1bn in property tax relief.

Even if the bill had failed, the fact that a sports-betting measure even made it to the House floor in Texas this year for the first time can be considered a significant victory for the industry.

“This is a huge day for Texas sports fans,” said Jeremy Kudon, a government affairs partner with law firm Orrick who represents DraftKings, FanDuel, BetMGM and professional sports leagues.

“Texans want and deserve the freedom to safely and legally bet on their favorite teams, and they are one chamber away from getting it,” Kudon said on Twitter.

One chamber away, however, is a massive understatement.

Texas Lieutenant Governor Dan Patrick has never even scheduled a committee hearing on sports betting.

Thursday’s House floor vote came one day after the constitutional resolution and an accompanying bill authorizing major Texas sports teams to partner with designated sportsbook operators to offer mobile sports wagering were amended on second reading.

Among other changes, lawmakers adopted amendments to allow Texas NASCAR and Formula One racetracks to qualify for licenses and raise a proposed upfront license fee from $500,000 to $2m. Another approved amendment would raise the proposed tax rate from 10 to 15 percent and limit deductions of promotional credits from taxable revenue to sportsbooks’ first 12 months of operations.

If Texas does not approve sports betting this year, the issue will languish for another two years because the state legislature meets biennially.

Texas, California and Florida are considered by far the three most lucrative states which have not yet entered the sports-betting market.

Meanwhile, the fate of another closely watched bill to allow destination-resort casinos in Texas was also expected to be decided in a vote late Thursday night.

An amended version of House Joint Resolution 155 was approved on second reading by a vote of 92-51 on Wednesday, leaving casino proponents needing at least eight additional votes in order to pass the measure.

The legislation would authorize two large-scale destination resorts in both the Dallas and Houston areas and additional casinos in other parts of Texas.

House members approved several amendments on Wednesday related to the locations of those smaller casinos. They also adopted another amendment that would prohibit any casino operators doing business in China from qualifying for a Texas license, before quickly amending that amendment to specify that it would apply only to mainland China and not to Macau.

The House voted 63-49 earlier on Thursday to approve an accompanying casino regulation bill, but the constitutional resolution requiring 100 votes to send the casino measure to the Senate was scheduled for after 10pm Texas time.

Additional reporting by James Kilsby.

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