Texas Introduces Bills To Legalize Online Sports Betting

Advocates of online sports betting in the Lone Star State have faced a challenging journey, but the 2023 legislative session is ushering in a renewed sense of hope for the cause.

Proposals in both chambers of the Texas state legislature have sparked discussions about potentially legalizing sports betting in Texas. Senator Lois Kolkhorst introduced SB 715 and SJR 39 in the Senate, while Representative Jeff Leach filed HB 1942 and HJR 102 in the House to regulate and legalize online sports betting in the state.

The legislature in the state of Texas convenes every other year, starting on January 10 and concluding on May 29. For online sports betting to be legalized in Texas, a constitutional amendment is needed due to the state constitution’s limitations on gambling.

If the legislature decides to put it on the ballot, voters will have the final say in the November 2023 general election.

The history of Texas’ sports betting bills

The proposed bills aim to establish a set of rules for online sports betting in Texas, including licensing criteria, safeguards for consumers, and consequences for failing to adhere to the regulations.

Under this framework, the state would be able to regulate the industry efficiently and ensure that all operators are following the highest standards of integrity and transparency. The Texas Lottery Commission would serve as the state’s regulator under the proposed legislation.

The bills suggest implementing a tax system for online sports betting that would levy a 10% tax on all revenues generated from such activities. This tax is expected to generate approximately $250 million in revenue for the state, which could be used to support crucial initiatives such as education and healthcare.

The average national tax rate for online sports betting is just 13%, making the potential framework of this new legislation very appealing for top sportsbooks looking to enter the second-most populous state.

Support for online sports betting in Texas

All the bills have the full backing of the Texas Sports Betting Alliance (SBA), a group consisting of professional sports teams, leagues, racetracks, and sportsbook operators.

Jerry Jones, owner of the Dallas Cowboys, has been a vocal supporter of legalizing online sports betting in Texas. He purchased a stake in DraftKings years before the US sports betting ban was lifted by the Supreme Court in 2018. The Cowboys are one of Texas’ professional sports franchises that is a member of the SBA.

Mark Cuban’s NBA team, the Dallas Mavericks, is a member of the Alliance and Cuban has expressed plans to collaborate with Las Vegas Sands in constructing a casino resort near the American Airlines Center, the Mavs’ home arena.

The SBA includes DraftKings, FanDuel, and BetMGM, three of the most popular sports betting sites in the United States, as members. Their influence in launching new online sports betting markets cannot be overstated.

The SBA is comprised of influential figures such as renowned operator Barstool Underscoreg, the Houston Astros of the MLB, the San Antonio Spurs of the NBA, the PGA Tour, and the Texas Motor Speedway. Former Governor Rick Perry is collaborating with the alliance on this matter as well.

The challenges for online sports betting in Texas

Lieutenant Governor Dan Patrick is viewed as the primary hindrance preventing the introduction of mobile sportsbooks, or any form of sports betting, in Texas.

In 2021, he stated that he has always been against online sports betting in Texas. As the 2023 legislative session approached in January, Lt. Gov. Patrick reiterated that he saw no progress towards legalizing sports betting in Texas.

It is noteworthy that Sen. Kolkhorst is the one carrying the new legislation in the Texas senate, as she has previously shown support for Lt. Gov. Patrick by championing his high-profile legislation, such as the “bathroom bill” in 2017.

Former Governor Perry may have a significant influence on Patrick’s stance. Patrick has referred to Perry as “one of my best friends in life” at a 2021 event for a congressional candidate, indicating a strong foundation of trust and credibility in their relationship.

Lt. Gov. Patrick may have the upper hand, but Governor Greg Abbott is considering expanding gambling in Texas following Beto O’Rourke’s push for legal casino gaming and sports betting during the recent gubernatorial election.

Timing for online sports betting in Texas

The introduction of the new bills coincides with a unique moment in the sports betting industry, as the Super Bowl attracts the highest amount of bets compared to any other event on the calendar.

Maybe the harsh reality that Texans are unable to wager on the major game will influence public perception and encourage lawmakers to reconsider their stance against it.

The states bordering Texas to the east and west, New Mexico and Louisiana, respectively, have thriving sports betting markets. New Mexico offers retail sportsbooks at select tribal casinos, while Louisiana has a strong presence in both online and in-person sports betting.

Regardless, Texans eager to participate will have to either travel to neighboring states or resort to offshore betting platforms while awaiting the opportunity to vote in November’s general elections to support the legalization of online sports betting, if legislators can reach a consensus on the regulations.

I am curious to see the progress of these bills in Texas’ shortened 4-month legislative session. If they do not pass, we will have to wait until 2025 for the legislature to reconvene.