April 07, 2005
A big fat nothing

I know that there's now bipartisan opposition to increased gambling this session, but we all know that it's going to raise its ugly head again one of these days. There's just too much money pushing for it, and too much lily-liveredness around state finances for it to ever truly be dead.

So with that in mind, how much has the state taken in from the current form of legal non-lottery gambling, namely horse tracks? How does bupkis grab you?


After 14 years of gambling at horse and greyhound tracks, live racing in Texas creates no tax revenue for state government.

That is $200 million less than racetracks said they would raise in 1986, when lawmakers approved pari-mutuel racing. Racing advocates also said the sport, which kicked off five years later, would create more than 10,000 jobs and pump $1.25 billion a year into Texas' economy; the industry's own studies acknowledge that it has fallen far short of both.

And while some tax money is now generated by simulcasting, a type of remote betting that was approved in 1991, heady predictions of a state windfall from live racing in Texas have not materialized.

Now, as they have many times before, the tracks' lobbyists are asking lawmakers to make the tracks more competitive this time by letting them add video lottery terminals, devices that work like slot machines.


If you can think of a reason why we should believe them this time around, you've got a future as a lobbyist. Me, I'm just saying No. Via Lasso.

Posted by Charles Kuffner on April 07, 2005 to Budget ballyhoo | TrackBack
Comments

The state indirectly collects millions of dollars a years in two ways:

1. There is a "takeout" made by each state from every betting pool based on the wager made. This can range from 13-25 percent, however, it depends on the type of bet and where the track is located.

2. Since racetracks pay off to the lowest 10 or 20 cents, the remainder of the true payoff (called breakage) is split between the racetrack and the state. For example, the pool shows that a horse would payoff a total of $4.23 to win for a $2 bet. If this case, the payoff to the winner is $4.20 with 3 cents breakage.

In both cases, the Texas Racing Commission should have further details as to the rules in their state. Regardless, it should add up to quite a substantial amount of money for the state on an annual basis.

On a slightly different note, I would also think that the sale of horses (whether by auction or claiming races) would generate a sales tax for the state.

Posted by: William Hughes on April 7, 2005 9:01 AM