AUSTIN — In an hourslong hearing Wednesday, a Texas House committee heard testimony on bills and resolutions that would expand gambling to include mobile sports betting and resort casinos.

Plano GOP Rep. Jeff Leach’s House Bill 1942, which would legalize mobile sports betting in Texas and is backed by the most prominent sportsbook operators and a majority of Texas’ professional teams, had his bill heard first, along with the constitutional amendment that goes along with his legislation.

The committee then heard from Reps. Charlie Geren, R-Fort Worth, and John Kuempel, R-Seguin, on resolutions and bills that would bring eight destination resort casinos to the Lone Star State, with two in Dallas-Fort Worth.

Kuempel and Geren’s legislation is backed by the Las Vegas Sands Corp., which has contributed millions in campaign donations and hired dozens of lobbyists to influence lawmakers.

Supporters of the bills touted economic benefits through taxes, jobs and construction projects. Opponents of gambling expansion hit on potential negative effects, like addiction and family violence.

The committee did not vote on any of the bills, but it can the next time it meets. If the committee approves any of the bills, the next stop is the House Calendars Committee, which decides when bills will come up for a vote on the House floor.

Gambling other than bets on parimutuel horse and dog racing is barred by the state constitution, so casino and mobile sports betting would require a constitutional amendment. That means a two-thirds majority vote is needed in both chambers before a bill makes it to the governor’s desk. If signed by the governor, Texas voters would have the final say in a November referendum.

Mobile sports betting

Leach said his bill is not so much an expansion of gambling, but regulation of sports betting because Texans are already wagering billions of dollars annually through illegal and offshore bookmakers.

Leach’s bill would allow only mobile sports betting and would prohibit brick and mortar sports books. Texas would join 35 states, along with Washington, D.C., in allowing sports betting.

“Texans are part of passionate fan bases and professional sports teams drive billions in economic development, economic impact, providing thousands of jobs and, in many instances, supportive of incredible charitable issues,” Leach said.

Under Leach’s bill, pro sports teams would partner with a mobile sportsbook, like DraftKings or FanDuel, to offer sports betting in Texas. The bill also sets a 10% tax rate on the gross gaming revenue, which is the amount of money Texans lose to betting. The funds would be earmarked for public education funding and to the Texas Education Agency for property tax relief.

However, Leach said he is open to negotiating the tax rate when asked by Rep. John Smithee, R-Amarillo. Smithee said the Legislature has a fiduciary duty to the taxpayers in the state.

“I’m absolutely willing to have that conversation with members of this committee,” Leach said.

Texas would have among the lowest tax rates in the country under the bill. Tennessee is at 20%; Pennsylvania 36% and New York and New Hampshire at 51%.

Scott Ward with the Sports Betting Alliance, a collective of major sportsbooks and Texas professional sports teams, said there is already a high demand for gambling in Texas.

Ward said that during the 2022-23 NFL season, there were close to 3 million attempts to place mobile bets in Texas through a legal sportsbook operator like DraftKings or FanDuel. Those bets failed because the sportsbooks use location to determine if a bet is coming from a state where gambling is legal.

Ward also said that during Super Bowl week, there were 84,000 blocked attempts and 73,000 last weekend during March Madness.

“We know they’re trying millions of times over unsuccessfully right now back in the state of the regulated market of Texas,” Ward said.

Resort casinos

For the first time, legislation allowing destination casino resorts has garnered support from top state officials. Both Gov. Greg Abbott and House Speaker Dade Phelan, R-Beaumont, have expressed openness to expanded gambling, with Phelan saying he supports destination resorts.

Geren, who is on the committee that heard testimony, offered a substitute that would allow for eight destination casino resorts. Besides two in D-FW, there would be two in the Houston area, and one in San Antonio, Corpus Christi and McAllen. The location of the final destination resort was not specified.

Kuempel is carrying the enabling legislation to Geren’s bill.

“It is not the creation of a new Las Vegas Strip and it does not allow slot machines in gas stations and convenience stores,” Kuempel said.

The resorts would add about 100,000 in temporary construction jobs and about 70,000 in permanent jobs, Geren said. Dallas Mavericks owner Mark Cuban has said he hopes to build a new basketball arena tied to one of the resorts.

John Foley, the vice president of government relations with Las Vegas Sands, said Texas is one of the last great markets and would benefit from adding destination casinos.

“These iconic structures are destinations within destination markets, they drive visitation and tourism and they’re not focused on the local market,” Foley said.

Kuempel’s bill would also allow for the Legislature to add sports wagering. But it would be up to the lawmakers if they want sports betting to be legal only at the casinos or if they want to add a mobile element.

Opposition to gambling

Speakers against gambling expansion cautioned about the negative aspects it could bring, like addictive gambling and a rise in family violence.

Jennifer Hughes, a lobbyist for the Kickapoo Tribe of Texas, which operates the Lucky Eagle Casino in Eagle Pass, said the tribe is against the sports betting bill because it would negatively impact and exclude them.

Rob Kohler, a consultant with the Christian Life Commission, opposed all gambling legislation. Kohler said Texas’ voters already made the decision in opposing gambling when they elected a majority of Republican lawmakers.

In a light-hearted moment, Kohler and Rep. Richard Peña Raymond, D-Laredo, got into a back-and-forth over the tax rate on the casino bill. Raymond asked Kohler if he would support raising the tax rate on the bill.

“I’m testifying that the juice ain’t worth the squeeze,” Kohler said, to laughter.

“You think we should be getting more juice?” Peña Raymond asked.

“I don’t think we should be squeezing,” Kohler replied.