Texas House Panel Hearing Gets Ball Rolling on Sports Betting

Texas House Panel Hearing Gets Ball Rolling on Sports Betting
© USA Today

With Arizona and Maryland passing sports betting bills this week, Texas has started the long process to do the same.

After more than 10 hours to go over various other bills, the Texas House Committee on State Affairs on Wednesday began a discussion on HB 2070, sponsored by state Rep. Dan Huberty (R, District 127), which would legalize sports betting in Texas.

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“Gambling is here. This bill will do two things. It will legalize and regulate monies that come into the state from sports betting and as many of you know, I have fought very hard for special education revenue specifically and monies would go into that and the general education fund,” said Huberty, who resides in Humble and testified that he likes to gamble. “Currently, the bill includes the best provisions from other states are doing. I will say this, the agreed-upon language in the bill provides a safe and competitive environment amongst all that will be involved.”

Huberty cited both the Houston Chronicle and San Antonio Express as examples of sports betting “in the state,” because betting spreads are published in both papers.

Texas-based Sports Betting Alliance (SBA), a group of professional sports teams and sports betting operators within the state, has estimated that $5.6 billion annually is spent by Texas residents at offshore and other unregulated and illegal platforms.

HB 2070, which will also include college sports betting, would legalize sports betting, including mobile, and would allow professional teams to be licensed operators. Sports betting within the state would have a 10% tax rate and a 7% hold, which could bring the state $40 million annually.

The money would be a source of much-needed educational revenue, Huberty said. For example, there are 3,240 high schools (2,813 public schools, 427 private schools) alone in the state.

Texas has 12 NCAA Division I schools (FBS) that play football and 24 that play Division I for men’s/women’s college basketball.

The bill is one of 10 proposals that has been filed in the state this year.

It will be a tough road in Texas. Lt. Gov. Dan Patrick, one of the most important figures in the state when it comes to passing legislation, said in February that he has never been in favor of sports betting.

The Texas legislature is in session until May 31. It only meets in odd-numbered years.

Two Hours of Testimony

After close to two hours of testimony, including in-favor testimonies from: Neil Leibman, chief operating officer and president of business operations for Texas Rangers; Eric Schippers, senior vice president of public affairs and government relations for Penn National Gaming (which runs three racetracks in the state and operates Barstool Sports within Pennsylvania, Michigan, Illinois); Tad Brown, chief executive officer of the Houston Rockets; and Scott Ward, an attorney for Orrick, which represents BetMGM, DraftKings and FanDuel.

Three testimonies against included live testimony from Jennifer Hughes, who represents the Kickapoo Traditional Tribe of Texas, as it would like to be involved for in-person sports wagering.

“I think we can support the bill, if language that we need is in there to participate in it,” Hughes said. “We can’t support it right now, but can if supportive language is added to it.”

Legislation is ‘Pending’

In the end — both Huberty’s bill and a House Joint Resolution (HJR 97) to have it on the ballot in November as a constitutional amendment — remained as pending by the committee.

Committees rarely vote out bills the day they are heard, so most bills are just left “pending” until the specific committee meets to take action on multiple bills at a later date, more often, to reflect on the testimony that was provided in the hearing.

For an HJR to pass in the states, a two-thirds majority is required in both the House (100 of 150 representatives) and Senate (21 of 31) and then could not be vetoed by Gov. Greg Abbott (R).

Huberty appears to have bipartisan support in the state Senate, where Juan “Chuy” Hinojosa (D, District 20) has SB 736 with similar language on where sports betting can be offered such as a professional arena or stadium where the seating capacity is at least 5,000, as well as the three horse racetracks — Lone Star Park (Grand Prairie), Retama Park (Selma) and Sam Houston Race Park (Houston).

Rep. Harold Dutton, Jr. (D, District 142) also has introduced HB 1121.