Texas Sends Mobile Sports Betting Legislation to the People of Texas

In recent months, there have been rumblings that the Texas House and Senate were on the verge of presenting some meaningful sports betting legislation to the voters. On February 6, 2023, the rumblings became a reality.

In fact, two companion bills, SB 715 and HB 1942, were filed for presentation to Texas voters during the voting cycle in November of this year. The companion bills are being sponsored by state Senator Lois Kolkhorst and Representative Jeff Leach.

To facilitate the presentation of these two bills to voters, proposed constitutional amendments (SJR 39 and HJR 102) had to be included in the legislative package. Both of these amendments will require legislative approval by two-thirds of the respective legislative bodies, plus approval from the voters in November.

In presenting this legislation, both bills have the full support of the "Sports Betting Alliance," a group that includes representation from every major professional franchise in Texas, including the Dallas Cowboys and Houston Astros. Obviously, the bills also have the full support of every major sports betting brand, including BetMGM, Caesars Sportsbook, DraftKings, and Fanduel.

Note: In a twist of irony, Jim "Mattress Mack" McIngvale actually opposes this legislation. McIngvale is famous for placing huge online sports wagers through other states in support of consumer promotions for his furniture business. He is against the legislation out of fear that Texans will have problems with gambling issues.

What is in These Bills?

Both of these bills are entirely focused on the legalization of online/mobile sports betting with no regard for retail sports betting. Both bills make clear that the Texas Lottery Commission will be appointed as the state's mobile sports betting regulator.

Here is a list of some key elements offered in these bills:

• Operators will be required to pay $500K for an initial three-year license
  
• The annual license renewal fee would be set at $100K
  
• Operators would be required to pay a 10% tax rate on "gross" gambling revenue
  
• Betting would be permissible on amateur sports above the high school level
  
• 2% of the taxes collected would be allocated to problem gambling directives
  

In addition to the above provisions, the Texas Lottery Commission would be granted authority to issue up to 15 sports betting master licenses. License applications would be accepted from sports franchises and horse racing tracks in partnership with sports betting operators, and from sports betting operators operating in their own interests.

To date, several sports teams have already expressed interest in securing one of the coveted sports betting licenses. That list includes:

• The Dallas Cowboys (NFL) - Jerry Jones (owner)
  
• The Houston Rockets (NBA) - Tilman Fertitta (owner)
  
• The Texas Rangers (MLB)
  
• The Houston Astros (MLB)
  
• The Dallas Stars (NHL)
  
• Sam Houston Race Park - Penn National Gaming (owner)
  

At this time, the passing of this legislation should be considered a 50/50 proposition. There are still hurdles to be cleared. If the legislation does pass, it's possible that Texas sports bettors could be in line to wager on Super Bowl LVIII in February 2024.