Texas Sports Betting Still Raising Concerns

As 2023 legislative sessions throughout the United States start to wind down, The Lone Star State has still yet to settle the future of sports betting in Texas. A push that once seemed like a formality this time around has, somewhat swiftly, devolved into ambiguity. And now, with roughly one month left before the legislative meetings adjourn, the fate of Texas sports betting is yet again hanging in the balance.

What will the end result be? Nobody's quite sure.

Indeed, Lieutenant Governor Dan Patrick has said the Texas Senate doesn't have the sports betting votes required to keep moving forward. But many believe that he's posturing, because this year's sports betting bill was proposed by allies in the Republican party, so there's little reason for him to dissuade support. Others simply think there's still time to sway any policymakers on the fence about Texas sports betting. This approach rests on the assumption that enough meaningful changes can be made to the Republican supported gambling bill, SJR 39. It's not quite clear whether that's the case.

This uncertainty is fitting. The entire issue of legal Texas sports betting is one giant maze of obfuscation. It has incited both division and confusion, a reality many don't quite understand. After all, Texas sports betting revenue stands to be through the roof. The Lone Star State is one of the three biggest gambling markets in the United States, right alongside New York and California. Texas will rake in additional profits hand over fist if they just make the transition more than 30 other states have made before them. This, in theory, isn't just an easy decision. It isn't a decision at all.

All of which raises the question: What's behind the hesitance to legalize Texas sports betting?

Texas Sports Betting Debate is Leaving The Lone Star State at War with Themselves

In the face of fading discussions among Texas lawmakers, news outlets have turned to psychologists and economists to help understand the holdup. To that end, Fox 51 recently spoke with Mark Jones, who is a politics professor at Rice University. He shined a spotlight on why Texas sports betting has taken yet another turn toward policy opposition.

“The lieutenant governor has serious qualms about the merits and benefits of gambling," Professor Jones explained. "That is, I think he sees the negative social consequences of gambling as often outweighing the revenue benefits.”

These "social consequences" to which Jones alludes are multi-fold. Upticks in gambling addiction are a universal worry among states that have legalized sports betting. Texas is no different. States that have already legalized gambling have opted to allocate percentages of their revenue toward problem-gambling initiatives and program funding. The Lone Star State could easily do the same.

Still, conservative-leaning states are notoriously more skeptical or stubborn on this front. This is especially true when the market itself isn't struggling. Texas isn't hurting for additional revenue the way other states might be. And on top of that, they're juggling dual-industry concerns. The rollout of sports betting in Texas likely means approving the commercialization of the casino business. That's yet another move the state has been reluctant to make—for many of the same reasons.

The Financial Benefits of Sports Betting in Texas are Getting Harder to Ignore

For so long, advocates of sports betting in Texas have argued the state's gambling market is already active. Residents can and will sign up with top online sportsbooks located abroad that allow them to place wagers. The off-shore sports betting market in Texas is so robust, in fact, certain policymakers have tried proposing laws that would police it.

The increase in states with legal sports wagering has only strengthened this pro-betting argument. Texans have still tried to sign up with domestic operators in other locations. Last month, over 73,000 bet attempts from Texas were blocked during the first week of the 2023 March Madness tournament, per data from the Texas Sports Betting Alliance.

It's impossible not to see the financial upside to legal sports gambling at this point. New York, which legalized sports betting in 2022, assesses a tax rate of roughly 50 percent. That's allowed them to churn out more than $861 million in additional revenue through March 2023.

While New York's tax rate is abnormally high, they are a nice parallel for The Star State. Texas has a similarly large sports market and overall population, which will give them a great deal of leverage over online operators.

Timeline for Texas Sports Betting Decision

If we had to guess right now, Texas sports betting will not be legalized during this round of legislative sessions. That, in turn, would make it difficult for the state to green light gambling before 2026. They could, in theory, approve a sports betting bill in early 2024. But there's no guarantee that's enough time for the proposal to appear on the 2024 general election ballot. And if it's not, the timeline for Texas sports betting gets pushed back an additional two years.

With all of this in mind, the 2023 sports gambling agenda isn't yet dead. The Texas legislative sessions are currently scheduled to adjourn on May 29, a little more than one month away at this writing.

Whatever the state decides, we'll have a better idea of what comes next, for better or worse, in a few short weeks.

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