How Gubernatorial Elections Impact Sports Betting, Casino Laws in TX, NY, MN, SC

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Gubernatorial candidates in several states have at least suggested they’re willing to move forward with sports betting and other gambling initiatives in their jurisdictions.

Between the main debate stage and other public forums over the past few weeks, candidates for governor in Texas, New York, Minnesota, and South Carolina have discussed the legalization of sports betting or casino expansion. While each of these states is in different phases of the legalization process, just about all of them share one quality in common: Certain candidates are open to exploring setting up safe, legal, and regulated markets that create new jobs and millions of new tax dollars.

In South Carolina, for example, Democrat challenger Joe Cunningham is running a campaign on “new ideas,” and thinks revenue from sports betting will help the state slowly phase out its income tax.

“This is about freedom and it’s already going on anyways,” Cunningham said in last week’s debate against current Gov. Henry McMaster. “The state might as well tax it and make some money off it.”

The four major sports leagues are on board, too. Having already partnered with some of the world’s largest betting apps and casinos, the NFL, MLB, NBA, and NHL have contended that a regulated environment protects the integrity of the games and takes viewer engagement to entirely new levels.

With those points in mind, let’s take a look at where all five states stand heading into Election Day:

Texas

The Lonestar State’s closest chance to legalize sports betting happened during last year’s state legislature. Even then, it didn’t come very close.

But the race between Republican Gov. Greg Abbott and Democrat challenger Beto O’Rourke could spell better luck for sportsbooks wanting to operate in what could become one of the country’s largest gaming markets overnight.

Beto O'Rourke, Gregg Abbott, Texas sports betting

Once vehemently against expanding gambling in Texas, Abbott last week said he’s willing to at least listen to business proposals from the casino industry. O’Rourke has repeatedly said he’s “inclined to support” casino gambling and legal sports betting to stop Texans from going across state lines to do it in other states, such as Louisiana.

“From listening to Texans across the state, it’s one, a very popular proposal, and two, it would also help us address some of the challenges we have in reducing inflation and property taxes in the state,” O’Rourke said in April.

One hurdle standing in front of both candidates: Texas has some of the country’s strongest laws against gambling. The state constitution itself prohibits expanded gambling, with exceptions for a state lottery, some bingo halls, and horse or dog races. Only one casino, owned by the Kickapoo Traditional Tribe of Texas and running under federal law, currently operates in Texas.

The bottom line? Even if both Abbott and O’Rourke support sports betting, they’re handcuffed by the Texas Constitution and will still likely face stiff opposition in the state’s legislature. Despite the flood of casino donations pouring in from across the country, Texans will likely have to wait until the 2024 ballot or 2025 legislature for sports betting to have a realistic shot.

New York

The Empire State already has one of the nation’s largest gambling markets. Although over two-thirds of its gaming tax revenue is generated by scratch-off tickets and other lottery games, mobile sports betting is gaining a bigger piece of the pie. From its legal launch on January 8 through October 23, New York sportsbook operators have raked in nearly $12 billion in handle, generating $483 million in tax dollars

But many eyes in the state are on the expansion of casino gambling, as Democrat Gov. Kathy Hochul supports plans for three new downstate casinos.

In last week’s gubernatorial debate, Democrat Gov. Kathy Hochul and Republican challenger Lee Zedlin both expressed a willingness to move forward with the new casino licenses. But Zedlin was more measured, calling for counties, cities, and Native American tribes to ultimately have the last say in whether their jurisdiction allowed the new casinos.

“Local control is important,” Zedlin said. “There’s a process that is underway, and it shouldn’t be jammed into areas that do not want it. We have to express the will of the people.”

In short, a Hochul win means the news casinos in the country’s biggest gambling state have the better chance of moving full steam ahead. A Zedlin administration wouldn’t exactly be bad news for the industry but could result in New York pumping the brakes to shore up regulatory issues.

Minnesota

The Gopher State’s legislature tried to move forward with a pair of bills at the end of the 2022 session, to no avail. But 2023 promises to offer a different result.

Democrat Gov. Tim Walz said in an Oct. 18 gubernatorial debate that while he wouldn’t push through a sports betting bill on his own, he’d support the state legislature if it did so. Walz called for “a framework to make sure it’s done right,” but insisted he trusts Minnesota’s elected officials and voters on the topic.

Scott Jensen, the Republican challenger, fully supports mobile sports betting in Minnesota to raise tax money for meaningful programs. He went as far as saying the state “needs to do this.”

Jensen is the more adamant proponent of the two candidates and would likely help pass sports betting more urgently than Walz. But the current governor also sounds like a friend of the industry going forward.

South Carolina

The Palmetto State allows just three forms of gambling: bingo, raffles, and a state lottery.

A sports betting bill, House Bill 5277, made it to a vote at the state legislature earlier this year, but lawmakers ultimately turned it down. A previous bill to legalize sports betting, HB3395, also failed to pass in 2021.

The state doesn’t have any propositions on next week’s ballot to immediately legalize sports betting. But U.S. Congressman Joe Cunningham, a Democrat challenging Republican Gov. Henry McMaster, has built his campaign on legalizing both sports betting and marijuana through the state legislature. Cunningham said in last week’s debate that if elected governor, he’d encourage the legislature to develop and pass through a sports betting bill for his office to rubber stamp.

“The state is missing out on a critical source of income,” Cunningham said.

Henry McMaster took the opposite side, arguing legal sports betting is “not the answer to anything,” and insinuating that it sends a bad message to children.

“Isn’t there some other way we can make money, by building businesses, getting people educated and trained and getting them working?”

In short, a McMaster reelection would hinder sports betting from becoming legal in South Carolina in the near future. If Cunningham wins, sports betting could be legalized as soon as Spring 2023. McMaster holds a near double-digit lead in the latest polling, likely making sports betting in South Carolina a pipe dream for the coming years.

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