Adelson Backs Casinos In Texas, Providing Gateway For Sportsbooks
The state of Texas has been home to longshot casino proposals for years, but will 2021 be different due in large part to the pandemic’s impact on state revenue? One Las Vegas casino mogul appears to be betting on the Lone Star State finally opening up to the commercial casino industry.
According to the Texas Tribune, Sheldon Adelson and his Las Vegas Sands Corp. have registered a team of 10 lobbyists that includes former top aides to the governor and the outgoing speaker of the Texas House. Boyd Gaming also reportedly has a former top aide to the lieutenant governor ready to lobby the legislature in 2021. Altogether, there are dozens of names on the state’s list of registered gambling lobbyists. Furthermore, Penn National Gaming, another top U.S. casino operator, is already present in the state through a trio of racetracks. PNG would love to make them racinos.
Adelson, who has a net worth of $37.4 billion, is one of the most powerful men in the gambling industry, if not the most powerful. He is a mega-donor to the Republican party, and Texas is controlled by Republicans. Adelson joining the mix in the Texas casino gambling debate is a major development. Any authorization of casino gambling would require voters to approve a constitutional amendment. It would take deep pockets to get an amendment passed in a state that has plenty of people opposed to gambling in general and one that would become a fierce battleground for competing gambling interests, both commercial and tribal.
Texans wager billions annually outside the state, in places like Nevada, Louisiana, and Oklahoma.
A 2013 study based on Texas allowing 13 racinos, six commercial casinos, and three tribal casinos projected they would generate $11.8 billion in new economic activity across the state. About 74,000 new jobs would be created, along with $3.4 billion in salaries, wages, and benefits.
The casinos were projected to win about $4.6 billion annually from gamblers. To put that into context: Prior to the pandemic, Nevada, the nation’s top casino gambling market, was seeing about $12 billion lost each year from gamblers. Las Vegas could take a hit from casinos in Texas.
Texas could see $1.2 billion in annual tax revenue from the casinos, the study estimated. The state’s two-year budget in 2019 was roughly $250 billion. According to the Texas Tribune, the state is looking at a roughly $4.6 billion shortfall. It’s less than was anticipated earlier this year, however.
Texas currently has parimutuel wagering and a state lottery, gambling previously authorized to generate new tax revenue. The same thinking would be applied to Las Vegas-style casinos.
Some policymakers in Texas think casinos should be used to fund residual windstorm insurance coverage and catastrophic flooding assistance in the state’s coastal areas. In other words, casinos could help combat the increasingly dire consequences of climate change, especially stronger hurricanes. Casino legislation pre-filed last month in Texas calls for casino money to fund those programs.
Adelson hasn’t publicly supported any specific casino proposal in the state.
What about just sports betting?
Legalized sports betting on its own could generate more than $125 million in annual taxes for the state. Gambling on sports is the hottest casino offering in the country right now, and any Texas casino push would surely include sportsbooks in some form.
A 2017 study commissioned by the American Gaming Association found that Texas has the potential to see nearly $19 billion in annual handle under market conditions with online/mobile wagering and a 10% tax rate on the industry. The state of New York is predicted to generate a smidgen more in handle on an annual basis, with Florida No. 4 with a roughly $17.5 billion projection. California is by far the most lucrative untapped market, with a projection of $36 billion in handle under the same conditions.
Texas would average about $1.5 billion in handle per month. New Jersey in October set the U.S. single-month handle record at $803 million.
It is unlikely a sports betting bill sans casinos would pass given Adelson’s lobbying presence in the state. While Adelson casinos do offer sports betting, Adelson and Las Vegas Sands have kept a distance from the rapidly expanding online gambling industry in the U.S. It’s hard to imagine Texas only legalizing sports betting over the internet and at existing gaming facilities, without Las Vegas-style casinos with slots, table games, and poker rooms as well. Adelson likely wouldn’t want to let competitors get a head start on the casino market through sports betting before full-fledged legalization.
Adelson is well known for opposing online gambling, but his casino company does offer online/mobile sports betting in Nevada. Sports betting isn’t as viable without the mobile option (some states are reporting 90% of handle coming via the internet), and Adelson knows that. However, it is conceivable Adelson could want only retail sports betting right out of the gate in Texas from a competitive standpoint.
Adelson would have the power to severely decrease the chances for any gambling bill in the state he didn’t like.
Prior to the pandemic, Texas had become one of the hottest poker markets in the country, thanks to social poker clubs that don’t charge a traditional rake but make their money from similar fees and on-site amenities. Some have questioned the legality of the social poker clubs. Though he’s opposed to online poker, one of Adelson’s Las Vegas casinos has one of the most successful poker rooms in the Silver State.
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