Will Texas Legalize Sports Betting?

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The state of Texas is home to 11 professional sports franchises, 10 D1 college athletic programs, and over 28 million people that support these teams and programs dearly. Texas residents are hopeful that the opportunity to wager legally on their favorite sports teams will come soon enough. 

Calls For Legalization in Texas

A Dallas Morning News poll in March of last year showed that 43% of Texans are in favor of legalizing sports betting, with 31% claiming that it was not important to them, and 26% opposing. That goes along with 57% support for casino gambling in the state. 

The road to legalization in the Lone Star State is more complicated than what the polling suggests, however. To bring sports betting or gambling of any form, the Texas legislature would have to undertake a complicated process of amending their state constitution.

With various interest groups advocating for and against the legalization of gambling, it remains to be seen just how strong of a priority local politicians will consider any lobbying efforts. 

In April, one high-profile political figure — candidate for Governor Beto O’Rourke — advocated for legal sports betting

“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…So, I think that warrants a very close look, and it’s something I’m inclined to support.”

It is estimated that Texans already partake in sports gambling to the tune of $5 billion per year, according to ABC 13 Houston. It makes sense that politicians would look to use the gambling bill to advertise a more socially driven impact that the revenue from gambling taxation and licensing fees will create.

Interested Parties

The professional franchises in the state clearly have made their voice heard with efforts to accelerate supportive legislation.

The Sports Betting Alliance is a lobbying group made up of Texas’ major professional sports teams and several major sports betting operators seeking to operate in Texas. These operators include DraftKings, FanDuel, Penn Gaming, and BetMGM. This lobbying group is one of the most aggressive lobbying players in the state looking to see legalization in the next two years. 

Operators are already looking to create relationships with Texas entities in preparation for future online gaming. BetMGM announced in May a deal to become the exclusive betting partner of the Houston Astros. 

https://twitter.com/BetMGM/status/1523658081028251649

In August of last year, Tilman Fertitta, owner of the Houston Rockets, announced a $1.6B deal that sold his company, Golden Nugget Online Gaming, to DraftKings. Included in this deal was an exclusive partnership between the Houston Rockets and DraftKings, making DraftKings the daily fantasy sports, sports betting, and iGaming for the team. Fertitta also expressed ambitions to open a sportsbook at the Toyota Center in downtown Houston, where the Rockets play.

Outside of lobbying, Texas has had a relatively public figure in gambling for some time. Perhaps the most outward-facing representation of gambling in Texas is the famous furniture store owner and active gambler Mattress Mack. Mack is notorious for laying down significant sums on his hometown Astros to win the World Series, among other bets (with regulated sportsbooks in legal states), typically using those wagers as a hedge against promotions he offers his customers. His presence in the sports gambling culture has shined a clear spotlight on the Houston businessman, despite the state’s non-legalized status. 

The Outlook for Sports Betting Legalization in Texas

The path to legalization for serious sports betting legislation rests in Texas lawmakers’ hands. While popular, sports betting lacks the urgency and emotional investment that many issues on the ballot and in the chambers of government command. Optimistic assessments put Texas sports betting unlikely to come to fruition until at least 2024. Both Lieutenant Governor Dan Patrick and Governor Greg Abbot oppose sports betting legalization, giving the bill no high-profile political supporters outside of challenger O’Rourke.

What is abundantly clear is that big-time players in the gaming space are betting on Texas legalizing gambling in the next five or so years. Operators like DraftKings and BetMGM would not be investing serious capital into partnerships solely for signage on the walls at Minute Maid Park or for branding on the Rocket’s backboards.

There is clearly a belief that the tide will turn from the industry’s biggest names. If Texas is to follow suit with legal online sports betting like neighboring states Louisiana and Arkansas, they should do it as soon as possible. With Californians voting on two sports betting referendums in Novemeber, including Prop 27 that would see operators pay extraordinary $100 million one-time licensing fees to access the state’s 39+ million people, Texas could offer a similar licensing fee package to excitable operators.

They say everything is bigger in Texas — I wouldn’t doubt that beloved phrase would apply to everything from licensing fees to gaming revenue taxes on participating operators.

For now, Texas residents are left to play with daily fantasy sports products from DraftKings, FanDuel, and several other operators. Jerry Jones and the Sports Betting Alliance currently investing heavily in rapid legalization will have to endure, in all likelihood, several more seasons of play before their first wager can be accepted. 

AP Photo by Tony Gutierrez

About the Author
Dan Zimmerman

Dan Zimmerman

Dan is the CEO and founder of Verse Gaming and a contributor to Gaming Today. Dan launched Verse Gaming out of his college dorm room at Syracuse University in 2020. Verse is a peer-2-peer social fantasy gaming platform where users compete in custom Daily Fantasy Sports contests against each other. Outside of Verse, Dan is an advisor to Out 2 Win Sports, an NIL agency representing college students across the east coast. Dan writes primarily on the topic of emerging gaming markets, fantasy and betting legislation, and innovation in gaming. Before Verse, Dan worked with Barstool Sports as a content creator.

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