Federal Hearing Could Have Impact on Future of Texas Sports Betting

A federal hearing is officially on the schedule to discuss the current climate of sports betting in the United States. And its outcome may have a direct impact on the future of Texas sports betting.

The United States Senate Committee on the Judiciary has set a meeting for Tuesday, December 17. The subject line of the hearing: America’s High-Stakes Bet on Sports Gambling. No concrete agenda on the meeting is currently available. But industry insiders say its purpose is to put the United States sports betting industry under the microscope.

What does this mean, exactly? And how might it impact the timeline, or lack thereof, for sports betting in Texas? Let’s go ahead and parse all the available details for possible answers.

Public Health Implications Expected to be at Center of Federal Hearing

While the agenda for this affair seems somewhat open-ended, most believe it will focus on the effects legal sports betting has on the state of public health. As Matthew Waters writers for Legal Sports Report:

“[Senator Richard] Blumenthal [D-CT] and Rep. Paul Tonko (D-NY) introduced the SAFE Bet Act earlier this year. The SAFE Bet Act aims to ‘address the public health implications inherent in the widespread legalization of sports betting.’ The proposal would include a variety of regulations, including advertising standards and consumer protections like deposit limits.

“Not all politicians are on board with taking action against the industry, including Nevada Rep. Dina Titus (D-NV). Titus said it’s ‘better to have self-regulation or state regulation,’ and not have federal involvement. The American Gaming Association came out against the bill shortly after it was announced.”

Opposition is part and parcel of any bill that is proposed. Everything in the United States is an agenda-driven issue. That is especially true of gambling. Just look at the status quo for Texas sports betting. Lieutenant Governor Dan Patrick has repeatedly said The Lone Star State will not ever legalize sports wagering until an initiative is heavily driven by Republicans.

Still, the opposition here may face stiff competition. Concerns about Americans’ unfettered access to the best online sports betting apps on the planet has mushroomed as the industry ages. And look, this makes sense. Sports betting in the United States remains in its infancy relative to the grand scheme. It isn’t yet seven years old. However, nearly a decade is enough time to understand some of the downsides. And make no mistakes, there are downsides. Reports of problem gambling are on the rise, and aggressive advertising practices have, multiple studies show, led to significant increases in sports among those under the age of 40.

Expect Sports Betting Operators and Certain States to Resist Federal Regulation of the Industry

Many of the concerns that will no doubt take center state at the hearing have come up during previous Texas sports betting discussions. And notably, two Texas Senators sit on the committee: Senator John Coryn and Senator Ted Cruz, both of whom are Republicans.

With this said, do not assume the absence of Texas sports betting will lead to support for the SAFE Bet Act from The Lone Star State’s policymakers. For starters, it’s a bill being sponsored by Democrats. That’s always problematic when Texas’ lawmakers lean ultra-conservative. On top of that, state representatives do not often love the idea of federal interference. Consider what Chris Cylke, the AGA Senior Vice President of Government Relations, has to say on the matter (via Waters)

“‘Today’s regulated sports wagering operators are contributing billions in state taxes across the U.S., protecting consumers from dangerous neighborhood bookies and illegal offshore websites, and working diligently with over 5,000 state and tribal regulators and other stakeholders to ensure a commitment to responsibility and positive play,’ Chris Cylke, the AGA senior vice president of government relations, said in a statement. “Six years into legal sports betting, introducing heavy-handed federal prohibitions is a slap in the face to state legislatures and gaming regulators who have dedicated countless time and resources to developing thoughtful frameworks unique to their jurisdictions, and have continued to iterate as their marketplaces evolve.’” 

Granted, this sounds like states will legal sports betting may have greater qualms with the SAFE Bet Act. But the response from Senator Cruz and Senator Coryn will be fascinating either way. After all, the push to legalize Texas sports betting is expected to resume in 2025.

Would Federal Involvement Help or Hurt the Chances of Texas Sports Betting?

Properly answering this question prior to the hearing is impossible. We need to see what comes out of it. 

If we had to guess, though, widespread support of the SAFE Bet Act likely wouldn’t mean anything good for Texas sports betting. Republicans tend to favor free markets. Federal oversight in Texas sports betting runs counter to that idea. 

Then again, perhaps the pending regime change results in the opposite. President elect Donald Trump will take office in 2025. Texas lawmakers may feel more at ease with the federal government injecting themselves into the industry when he’s at the helm.

And yet, presidential terms are just four years. Federal oversight could mean different things for separate regimes. So if push comes to shove, we would bank on Texas sports betting supporters and opponents showing disdain for the SAFE Bet Act. But like we said, we cannot know for sure until the hearing takes place. And even then, it is not currently clear what, if anything, this hearing figures to accomplish.

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