AUSTIN — Three Texas lawmakers, including two influential Republicans, filed bipartisan legislation Monday that would legalize digital sports betting in Texas, separate from previous legislation that ties sports gambling to the effort to legalize resort casinos in Dallas and other major cities.
The bills, along with the proposed constitutional amendments, were filed by Sen. Lois Kolkhorst, R-Brenham, and Rep. Jeff Leach, R-Plano. Sen. Juan “Chuy” Hinojosa, D-McAllen, is the joint author with Kolkhorst. Hinojosa carried the same bill in 2021.
The legislation is backed by the Texas Sports Betting Alliance, a collective that includes prominent sportsbook operators and all of Texas’ major professional athletic teams and their powerhouse owners, including the Dallas Cowboys owner Jerry Jones and Dallas Mavericks owner Mark Cuban. In its push to get Texas to join the dozens of states with digital sports gambling, the group has hired former Gov. Rick Perry to be the spokesman.
The bills were filed during Super Bowl week, which climaxes Sunday with the NFL championship game between the Kansas City Chiefs and the Philadelphia Eagles.
“It makes sense to rein in all of the illegal offshore betting and keep sports wagering funds here in Texas,” Kolkhorst said in a statement. “This is a sensible plan, which is why so many states have already passed similar legislation.”
The bills come just days after Republican Rep. Charlie Geren, R-Fort Worth, filed a constitutional amendment to legalize casino and sports gambling. Sen. Carol Alvarado, D-Houston, filed a similar Senate resolution in November.
In North Texas, the alliance includes owners of the Dallas Cowboys, FC Dallas, Dallas Mavericks, Texas Rangers and Dallas Stars.
Introduction of a sports betting-only constitutional amendment was expected. The sports gambling industry hopes that if the measures that might lead to legalization of both sports and casino betting failed to pass, a sports betting-only bill would have a better shot. Gov. Greg Abbott and House Speaker Dade Phelan, R-Beaumont, have said they are open to expanding gambling in Texas.
“Revenue from legal mobile sports betting in Texas could bring in more than a quarter billion [dollars] in the first biennium alone,” Perry said in a written statement. “Our neighboring states are cashing in on Texans’ bets and a smart, efficient legal framework will keep that revenue here to go towards much-needed property tax relief.”
Since the U.S. Supreme Court overturned a federal ban on sports betting in 2018, states across the country have rushed to legalize it. Currently, sports betting is legal in about 36 states, according to the American Gaming Association, including neighboring Louisiana and Arkansas. Oklahoma Gov. Kevin Stitt is pushing for his state to legalize it this year.
For sports betting to become legal, voters must amend the state Constitution. Two-thirds of both the House and Senate must approve the constitutional amendment resolution. Texas’ voters would get the final say in an election that would be held on Nov. 7.
The bills would impose a 10% tax on winning bets, with 2% of that devoted to grants for treatment of problem gambling and addiction. The remaining piece would go to the general revenue fund to the Texas Education Agency and be used to provide property tax relief for Texans.
Leach, the lead House author, said the bill would “protect our citizens from the illegal and increasingly dangerous sports betting market that preys on unsuspecting consumers, including minors, putting their personal and financial information at great risk.”
Legalizing any form of gambling in Texas faces uphill battles, despite polls showing that an overwhelming majority of state residents support legalizing it. Texas is among the biggest states with a number of pro teams whose owners want mobile sports betting legalized. Cowboys owner Jones gave $500,000 to Abbott’s reelection campaign, as well as $200,000 to Lt. Gov. Dan Patrick.
Houston Rockets owner Tilman Fertitta, owner of several casinos, also gave the same amount to Abbott and Patrick.
“It will give Texans the ability to decide for themselves if they want this activity safely regulated or continue to be conducted in the shadows by out-of-state betting platforms,” Jones said in a written statement.
The sports betting industry is using several arguments to persuade Texas to legalize the practice. Texans are already sports betting illegally using digital offshore sportsbooks or legal betting services when they are in states that allow it. In New York, the state saw $16 billion wagered in the first calendar year of mobile sports betting.
Proponents also argue that Texas is missing out on millions of dollars in tax revenue. This year, though, Texas lawmakers writing the state budget can tap nearly $70 billion of new state discretionary revenue, and that’s without a new source of tax dollars such as gambling.
