Should Texas Legalize Casino Gambling
Texas lawmakers should not expand gambling or allow casino gambling just to increase state coffers. Increased gambling would hurt Texas families, especially our poor families. The Legislature should again beat back any efforts to legalize casino gambling. Some Texans seem enthralled by the mountains of cash that casinos would generate, but that's short-sighted.
- Texas is very big, so these three casinos may be very far away from you if you live in the state. There is Naskila Gambling, located in eastern Texas in Livingston. About an hour north of Dallas is the WinStar World Casino and Resort located just over the Texas border in Oklahoma, where casino gambling is legal.
- Now, as more and more states passed laws allowing for casinos, the losses mounted for Texas: A study in 2013 found Texans spent $2.96 billion gambling in casinos in New Mexico, Oklahoma, Arkansas.
- The temptation to legalize casino gambling is great.
Texas has the strictest gambling laws in the country, but could the state benefit from changing its outlook? Texas Hold ‘Em is perhaps the most popular card game in the world, but if you were to play it in the state that it took its name from, you could find yourself facing a $500 misdemeanor fine.
Texas has some of the strictest gambling laws in the whole of the United States, if not the entire western world. Penal Code 47.01 prohibits almost every form of gambling in the state, apart from a few bizarre exceptions like dog and horse racing.
Roulette, slot casino wagering and sports betting are all strictly off-limits in Texas (well, almost strictly off-limits, but we’ll get to that later). In this article, we take an in-depth look at what is and isn’t legal in the state, as well as hypothesizing whether Texas would benefit from adopting the same approach to gambling as the United Kingdom.
What is illegal in Texas?
Under the Penal Code, any form of gambling, defined as a bet placed on the premise of winning or losing something based purely on chance, is illegal. The following activities are classed definitively as gambling and are therefore illegal in Texas:
1. Casino gambling
All forms of casino gambling are illegal in Texas.
Every game on offer in a casino, from slot machines to poker, blackjack, and roulette, is categorized as gambling and is considered illegal. The law is not just limited to landbased casinos but it also applies to online companies looking to provide casino games to customers, too. Texan people currently cannot enjoy the amazing variety of games people can access in the UK at registered, popular sites like 888 Casino, where you’ll find exhilarating graphics and exciting games, including online roulette, blackjack, and poker.
However, there is one notable exception to this law which prohibits ‘keeping a gambling place’. In Native American lands, this law is not applicable meaning there are one or two places within the state where you can enjoy casino gambling facilities.
2. Sports betting
A night spent wagering on greyhound racing is legal in Texas, whilst more mainstream sports betting is not.
Wagering on the outcome of any mainstream sport in Texas is illegal and subject to the $500 misdemeanor fine. That applies to betting shops which are strictly prohibited and also the use of sports betting websites that may be registered in a different state or country.
Horse racing and dog racing are however exempt from these laws, but only at licensed premises where you are permitted to bet just off the track. Simulcast races and ontrack pari-mutuel wagering are legal for horse racing.
Whilst there is a limit of three racetrack licenses for greyhound wagering with simulcast races and on-track pari-mutuel wagering also being legal.
3. Social Gambling
You may well think that social gambling would cover any form of gambling played between friends, such as a poker night or a special casino-style evening. However, in Texas social gambling refers solely to bingo and raffles sponsored by charitable organizations or licensed lotteries.
These activities are legal and enjoyed by many Texas residents. Social gambling in the non-legal sense is not. Even if you’re just playing a friendly game of cards at home with your friends you are all technically breaking the law.
Are there plans to loosen gambling laws in Texas?
Some states in the USA have legalized gambling, with it becoming increasingly popular.
The entire country is currently facing a crossroads when it comes to gambling, particularly the online derivative. In many states across the USA, there is a clear disparity between land-based gambling and online gambling with the latter almost always being illegal or at least partially prohibited.
At the time of writing a small handful of states have taken the bold step to legalize most forms of online gambling and are currently reaping the economic benefits. This has led to a lot more states putting forward tentative legislation to do the same, and it is expected that most states will have moved towards legalization by at least 2021.
Texas, however, is one of the most traditionally conservative states in the USA and will most likely be one of the last, if not the last states to loosen their gambling laws. There is a bill currently on the docket that pro-gambling advocates are pushing for, but that concerns mainly sports betting.
It is therefore likely that sports betting will be the first gambling act to be legalized throughout Texas. Gambling fans will, however, have to wait at least a few more years to see any further movement on casino, cards, and online gambling laws.
Is it worth loosening the gambling laws?
The arguments for and against gambling laws often become heated and extreme. One of the best and calmest way to analyze the effects of looser gambling laws is by being objective and looking to the example of the United Kingdom, a country that has previously struggled with gambling legislation but is now providing a successful blueprint.
British Gambling: An overview
Online gambling in the UK is booming, with the economy seeing significant boosts from since it was introduced.
In the United Kingdom (excluding Northern Ireland) almost every form of gambling is legal, ranging from casino betting and lotteries to online sports wagering. That policy of legalization has been hugely beneficial for the country.
The British economy has grown and benefitted from the widespread legalization of gambling. The industry in its entirety represents annual revenues of £15 billion ($19.76 billion) and provides hundreds of thousands of jobs.
One of the biggest arguments against gambling legalization is always the social problems that may be incurred by gambling. However, in the UK experts claim that extra exposure to gambling has resulted in a more mature attitude to gambling, with a population who’s less likely to encounter problems with gambling.
The National Lottery in the UK has been running for the better part of three decades is one of the biggest contributors to charity in the country. It has helped to fund various schemes and enterprises as well as provide funding to the Olympic teams. In addition to this, every gambling operator in the country is required to donate a percentage of their turnover to gambling charities which provide help to those struggling with gambling problems.
Summary
On the balance of all available evidence, it is safe to say that the legalization of gambling in the UK has had a positive impact on a range of measurable areas. With public opinion beginning to lean towards a similar approach in the USA and Texas, perhaps lawmakers should look to follow their lead?
Perhaps one of the industry’s biggest mysteries is that no state has taken the plunge with online casino gaming in the five-plus years since New Jersey first flipped the switch on its regulated iGaming market.
As things stand, legal online casino gaming is still only available in New Jersey and Delaware. The only other online gaming state, Nevada, allows internet poker.
The protracted status quo is set for a shakeup, though. is poised to join this select club on July 15 when its long-awaited online gaming market is slated to go live in a coordinated launch.
Meanwhile, West Virginiarecently became the fifth state to pass online gambling legislation, including for online casinos.
And there are high hopes that Michigan will green-light online casinos following former Gov. Rick Snyder’s surprise veto of legislation in December.
However, there is one reason why there hasn’t been a great deal of interest in casino legislation this past 12 months. Sports betting has stolen the limelight following PASPA’s repeal in May 2018.
With wagering on sports presenting casinos and state governments with a completely new source of revenue, it has been the shiny new thing.
Online entrepreneur Chris Sheffield, who served as SVP of interactive at Penn National Gaming for four years until his departure in February, said: “Certainly, there has been a furor and gold rush around sports betting, which has taken the focus from iGaming, but it will be interesting to see how the Pennsylvania iGaming market develops later this year.”
New Jersey’s soaring online casino market
Lawmakers pondering online casino legislation should look no further than New Jersey for guidance. Despite teething problems with customer onboarding in the early days, the Garden State’s online gaming market has gone from strength to strength, with more than 20 NJ online casino brands for players to choose from these days.
While online poker continues to flatline, casinos have been star performers, particularly of late. Revenue (excluding poker) hit a record high of $37.2 million for March, a whopping 24% increase over February’s $29.9 million.
To date, casino revenue has almost reached the magic $1 billion mark, while nearly $200 million has been raised from gaming taxes. The market has also consistently grown over the past five years, reaching $277.3 million in revenue for 2018, almost three times the $93.8 million in revenue generated back in 2014.
Therefore, it had been anticipated that New Jersey would trigger a domino effect, yet the inertia has left one experienced gambling executive scratching his head.
“I am surprised that more US states have not regulated online casino gaming given the experience in New Jersey,” said Jim Ryan, CEO of Pala Interactive, the operator of PalaCasino.com in New Jersey since 2014.
“That being said, the message is now getting out to state legislators and they have over five years of New Jersey data to consider as they look at the opportunity for their own state.”
More choice equals more online gambling revenue
One driving factor behind online casinos’ growth spurt recently in New Jersey is the availability of online and mobile sports betting. There are now more than a dozen NJ regulated online sportsbook brands, and this could surpass 20 by the time the NFL season starts.
Quite clearly, gamblers placing wagers on MarchMadnessor baseball, for instance, have been tempted to click on the casino tab to play a few hands of blackjack or a chance on slots.
This cross-sell effect has helped Betfair Casino increase its market share to an estimated 15% in New Jersey thanks to players being coaxed across from sister brand FanDuel Sportsbook.
In Europe, it is rare to find an online sportsbook that doesn’t also serve up table gamesand slots. Similarly, previous casino-only operators like LeoVegas and Mr Green rolled out sportsbooks for cross-selling purposes and to drive engagement and prevent customers from going elsewhere to bet sports.
So, mobile sportsbooks operating in states that don’t allow online casinos will be missing out on this cross-selling opportunity and additional revenue. This, in turn, leads to a smaller market than would otherwise be the case and fewer tax dollars collected from online gambling.
Should Texas Legalize Casino Gambling Laws
Yaniv Sherman, who spearheads 888’s US operations as head of commercial development, said: “On a financial level, a market that offers more games will be more successful, whether it is more sports variety, or sport and casino and poker. That’s a mathematical certainty.”
He also insists markets with just mobile sports betting will be bad for a couple of reasons: “Leaving it as sport-only for the longer term will eventually curtail growth because it will be a very competitive landscape.
“And if everyone is offering the same sporting events and basically the same trading then it’s less appealing to the player and less of a differentiator for the operators themselves.”
Overcoming the challenges of casino acceptance
While online casinos are a reliable earner for operators, compared to the volatile nature of bookmaking, there is no escaping the fact it is a harder form of gambling than sports betting. This inherent fact can make politicians uncomfortable about allowing desktop and mobile casino gaming.
Sherman said: “Out of the three [sports betting, poker and casino] on a sliding scale of controversy, sports betting is, by far, the most popular and least controversial right now. Poker comes next as more of a skill and social game and casino comes last in terms of its acceptance.”
Therefore, it’s vitally important for regulators to deploy rigorous measures to ensure operators provide a safe environment for players and can monitor playing patterns to detect problem gambling behaviors.
Players also should have the tools to limit their spending, playing time and set cooling-off periods. They should also be able to easily self-exclude and, as is the case in New Jersey, bar themselves from all sites in one go.
Moreover, when it comes to gamblers’ preference, a safe, regulated and taxed online casino industry has to be an ideal option than logging onto unlicensed offshore sites with no meaningful regulatory oversight and player protections in place. Indeed, Pala’s Ryan says New Jersey has “some of the most rigorous consumer protection measures in the world.”
Debunking the gaming and casino cannibalization myths
Another potential barrier preventing states from passing online casino legislation is the misconception that internet gambling takes business from brick-and-mortar properties.
However, this has proved to be a fallacy in New Jersey. For example, an online gambling hearing in Pennsylvania in 2017 heard how 89% of players who registered at Golden Nugget’sonline casino in New Jersey were new customers, wholly unknown to the casino.
Ryan also dismisses the cannibalization argument in New Jersey: “The online gaming market has not cannibalized the land-based market, and, in fact, it could be argued that the land-based market has grown because of online.”
Online gaming, however, suits those people who reside a significant distance from a casino property, or those who feel intimidated setting foot on a casino floor and gambling in person. It also enables smaller casinos, and those properties situated in isolated spots, to better compete in the virtual world on a more equal footing with larger land-based rivals.
Sherman said: “If anything, it [online casino] allows smaller properties in remote areas to punch above their weight, take a piece of the bigger gaming pie, and see it as an opportunity.”
The knock-on effects of regulated iGaming
Besides providing gaming taxes for state coffers, online casinos create jobs, too. In fact, a study sponsored by online gaming trade association, iDEA Growth, found that between November 2013 and December 2016, online gaming in New Jersey, directly and indirectly, generated 3,374 jobs and $218.9 million paid in wages to employees.
With these tangible economic benefits, it’s somewhat puzzling why other states apart from Pennsylvania and West Virginia haven’t followed New Jersey’s lead.
Ryan blamed “fear, uncertainty and doubt by state-based governments.” He continued: “This simply is an area that is not well understood by state legislators, and when in doubt they will tend to stick with the status quo.”
Yet, it’s clear those states allowing just online sports betting are leaving money on the table. A comprehensive suite of products maximizes cross-selling, while operators can acquire customers through one vertical and encourage them to play other products, thereby increasing a player’s lifetime value (LTV).
Should Texas Legalize Casino Gambling Losses
For now, though, sports betting will be the focus, Sheffield suggested. “In my view, sports betting will take the driving seat in most states for a while. It’s more palatable for politicians – everyone bets on sports – and can be used to help footfall in land-based casinos. And, of course, it creates jobs and raises much-needed taxes.”
He added: “Online gaming still has some challenges, even within the land-based business itself with worries around cannibalization. However, as we can already see from operators such as DraftKings in New Jersey, significant revenues can be generated from iGaming by sports and DFS customers, and land-based casino operators already have legions of customers just itching to play their favorite games online.”
So, all that’s needed is for state legislators to allow those players to scratch that itch, though that seems easier said than done right now.