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Bills to allow casinos filed

Don’t bet on them, that’s my advice.

Sen. Carol Alvarado

Two Texas lawmakers on Tuesday filed legislation backed by the gaming empire Las Vegas Sands that would legalize casino gambling in Texas.

The legislation was filed by Rep. John Kuempel, R-Seguin, in the House and Sen. Carol Alvarado, D-Houston, in the Senate. The proposals would create special casino licenses for four “destination resorts” in the state’s four largest metropolitan areas: Dallas-Fort Worth, Houston, San Antonio and Austin. At the same time, it would establish a Texas Gaming Commission to regulate the casinos, and it would separately legalize sports betting.

The legislation would require amending the Texas Constitution, which currently bans most gaming in Texas. That is only possible with a two-thirds vote of lawmakers in both chambers, and then voter approval in the November election.

Kuempel is the vice chair of the House Licensing and Administrative Procedures Committee, which oversees industries regulated by the state, including current gaming options. Alvarado, meanwhile, chairs the Senate Democratic Caucus.

Las Vegas Sands, founded by the late GOP megadonor Sheldon Adelson, has spent the past few months building a massive push at the Capitol, spending millions of dollars to hire nearly six dozen lobbyists. The bill-filing deadline for the biennial legislative session, which got underway in January, is Friday.

“We appreciate the work of the bill’s sponsors and we are excited to engage in further discussion with elected leaders and community stakeholders on the possibilities for expanding Texas’ tourism offerings through destination resorts,” Andy Abboud, Las Vegas Sands senior vice president, said in a statement.

The legislation is consistent with the vision that Las Vegas Sands has laid out for casinos in Texas: a limited number of licenses for mixed-use “destination resorts” in the state’s biggest population centers, with a high minimum investment intended to attract only the best operators. To that end, the legislation calls for a land and development investment of at least $2 billion in Dallas-Fort Worth and Houston, as well as $1 billion for San Antonio and Austin.

The “destination resort” licenses would be considered “Class I” licenses. The legislation would then create three “Class II” licenses for “limited casino gaming” at horse-race tracks in Dallas-Fort Worth, Houston and San Antonio. After that, two “Class III” licenses would be made available for similarly limited casino gambling at greyhound tracks in Corpus Christi and Harlingen.

The full casino legalization would also extend to the state’s three federally recognized Native American tribes at their reservations in El Paso, Eagle Pass and Livingston. They are currently able to offer limited gaming.

See herer and here for more on the casinos’ latest push to legalize more forms of gambling in Texas. As the story notes, that recent DMN/UT Tyler poll included questions about casinos and sports betting, and found them both to have popular support; not a surprise, as gambling has always polled well in Texas. (They also have Mattress Mack in their corner.) The obstacles remain the same: Neither Greg Abbott nor Dan Patrick support this, and a two-thirds majority, which is needed to put the propositions to a vote, is a high bar to clear. Maybe this is the year it happens, but you could have said that about many previous legislative sessions. The smart money remains on the bills not passing.

The Sports Betting Alliance

Keep an eye on this.

A new alliance of major Texas sports teams has announced they will be backing legislation to allow for sports betting in Texas.

The Dallas Cowboys, the Texas Rangers, and the Dallas Mavericks are among the first members of the Sports Betting Alliance, with more teams expected to announce their association with the group according to the Dallas Morning News.

While 25 states have legalized sports betting some of the largest, including California, Florida, and the lone star state have not yet legalized the industry that could bring in billions nationally.

The announcement of the Sports Betting Alliance comes after the late Sheldon Adelson’s group, Las Vegas Sands, expanded their lobbying effort to legalize gaming in Texas.

The Las Vegas Sands lobbying effort appears to want to work in tandem with the sports betting alliance to make the biggest push to legalize both sports betting and gambling in Texas in recent memory.

That DMN story is paywalled, so the synopses of it here and here are the best I can do at this time. There are quotes from Mavericks owner Mark Cuban and lobbyist Andy Abboud, who is also busy with the push for casinos. The major sports leagues were endorsing federal legislation to allow wagering on their games a few years ago, and a SCOTUS decision in 2018 opened the door for states to get in on the act, though states like Texas would have to change their own laws first. Which is where we are now, and though the economic outlook is better than it was a few months ago, the pressure to expand gambling is increasing, at least if you think of it in terms of the financial interests that are pursuing it. The Lege has remained steadfast, including in some really hard times, and until Dan Patrick says he’s for it, I’m betting the under.

And just a few hours after I typed that, I saw this.

While other states race to legalize sports betting, don’t count on Texas to follow suit.

Lt. Gov. Dan Patrick told a radio host in Lubbock on Tuesday that he just doesn’t see support for the idea in the Texas Senate, which he presides over, or among Republican voters.

“It’s not even an issue that’s going to see the light of day this session,” Patrick told Chad Hasty on KFYO in Lubbock.

Patrick said he personally has never been in favor of expanding legal gaming, but beyond that, there are not enough members of the Texas Senate in favor of it — which makes the issue a waste of time.

“We are nowhere close to having the votes for it,” Patrick said.

OK then. You can still expect more sports teams to get on this bandwagon and make a lot of noise about it, and who knows, maybe they will be able to wrangle a few more votes. But adjust your expectations accordingly. The Sports Betting Alliance US and Sports Betting Alliance TX each have Twitter feeds to follow, though they are currently vacant, if you’re interested in that sort of thing.

Here comes the casino push

Expect this to get louder and louder, though whether it’s successful or not remains to be seen.

Casino1

When a big political player comes waltzing into Texas spending big money from out of state, it’s usually a good sign that he wants something from lawmakers. So when Las Vegas casino magnate Sheldon Adelson and his wife, Miriam, spent $4.5 million to help Republicans keep control of the Texas House in 2020, heads turned.

While Adelson is known for cutting big checks—he’s one of the most powerful GOP mega-donors in the country—he doesn’t usually spend so lavishly on state-level politics. What did he want with Texas?

After the election, it became clear that Adelson was embarking on an all-out push to legalize casino gambling in Texas. In November, his corporation Las Vegas Sands started hiring some of the most powerful, well-connected lobbyists in Austin. The company declined to comment, though in early December, Andy Abboud, the company’s senior vice president for government relations, made the plans official. In an online panel at Texas Taxpayers and Research Association’s annual conference, he laid out the company’s hopes that Texas lawmakers would approve legislation lifting the casino ban, allowing for the establishment of a limited number of luxury destination casinos in the state’s major metro areas. “Texas is considered the biggest plum still waiting to be [picked],” Abboud said.

Gaming laws in Texas are among the most restrictive in the country, with bans on almost all gambling—including slots, table games, and sports betting—enshrined in the Texas Constitution since the Prohibition Era. Currently, gaming is restricted to wagers on dog and horse racing, charitable bingo, and the state lottery. The state’s three federally recognized Native American tribes are allowed to operate casinos with limited games, though the state has repeatedly contested their rights in the courts. Republican leaders like Governor Greg Abbott and U.S. Senator John Cornyn have aggressively resisted tribes’ attempts to expand gaming.

Abboud encouraged hesitant lawmakers to think “like you’re attracting Tesla or an Amazon facility or an entirely new industry to the state that’s going to create tens of thousands of jobs and hundreds of millions of dollars in tax revenue and ancillary benefits of hotels and tourism.”

[…]

Adelson’s casino push comes as lawmakers head into a session facing deep revenue shortfalls spurred by the pandemic and resulting economic crisis. In past sessions, casino proponents have argued that the state’s gaming prohibition has allowed billions of dollars to abscond into Oklahoma and Louisiana, where casinos are conveniently located just across the border. But opponents say that promises of revenue windfalls are overblown and would not provide a sustainable new revenue stream.

Abboud argued that Las Vegas Sands’ model for casinos in Texas would build another economic pillar in the state, helping to ease the state’s dependence on the oil and gas industry. “Will they solve all economic problems? No. Will it stabilize the economy? Yes,” he said.

So far, the only casino gambling legislation filed is from state Representative Joe Deshotel, a Beaumont Democrat, whose bill would legalize casinos to fund insurance programs for those living in hurricane-prone areas along the Gulf Coast.

Who ends up authoring the Adelson camp’s bill in the Texas House and Senate will have big implications for its success. If an ally of Lieutenant Governor Dan Patrick authors casino legislation in the Senate, that could be a sign that Patrick would allow it to get a vote on the floor, says Mark P. Jones, a political science professor at Rice University. “If Patrick is on board, it passes. If Patrick is not on board, it doesn’t. It’s about as simple as that,” Jones says. A signal of support from Patrick, a social conservative who has previously opposed gambling, could also sway House Republicans who would otherwise worry about primary challenges from the right, he adds.

This Chron story from early December is the reference for those Andy Abboud quotes. We go through something like this every two years, and the smart money has always been to bet against any expansion of gambling, including casinos. The financial arguments have some merit, though they are surely being overblown by the casino interests. The catch there is that Greg Abbott and Dan Patrick et al don’t see a lack of revenue as a problem but as an opportunity to cut costs. Maybe this time it’s different, I don’t know, though now that the revenue picture isn’t as bad as it once looked, whatever financial argument the casinos may have made has less heft.

The casino interests have certainly hired a bunch of expensive and well-connected Republican lobbyists, so I do expect they’ll be able to get some facetime and bend a few ears. Maybe this is a long-term play, as Jim Henson suggests, where the groundwork gets laid this session and ultimate success comes a few years down the road. Who knows?

I remain ambivalent on the whole thing – I don’t have a problem with gambling and generally think adults should be allowed to partake in it, but I don’t see casinos as a net positive, and I believe the economic benefits that get touted will be extremely limited to a small class of renters, and not much good to anyone else. If we do someday get to vote on it as a constitutional amendment, I’ll have to see what the specifics are before I decide. We’ll keep an eye on this because it’s likely a high tide year for gambling interests, but as always don’t expect much.

UPDATE: I drafted this over the weekend, and since then Sheldon Adelson has passed away. I don’t believe that changes the calculus in any way, but I’m sure someone would have noted that in the comments if I hadn’t, so here we are.

Here’s the official budget forecast

“Could be worse” remains the watchword.

Texas lawmakers will enter the legislative session this week with an estimated $112.5 billion available to allocate for general purpose spending in the next two-year state budget, a number that’s down slightly from the current budget but is significantly higher than what was estimated this summer when the coronavirus began to devastate the economy.

Texas Comptroller Glenn Hegar on Monday announced that number in his biennial revenue estimate, which sets the amount lawmakers can commit to spending when they write a new budget this year. But he acknowledged that Texas’ economic future remains “clouded in uncertainty” and that numbers could change in the coming months.

Hegar also announced a nearly $1 billion deficit for the current state budget that lawmakers must make up, a significantly smaller shortfall than Hegar expected over the summer. That number, however, doesn’t account for 5% cuts to state agencies’ budgets that Gov. Greg Abbott, House Speaker Dennis Bonnen and Lt. Gov. Dan Patrick ordered this summer or any supplemental changes to the budget lawmakers will have to make.

Hegar’s estimates portend a difficult budget-writing session for lawmakers. But Hegar acknowledged that things could have been a lot worse. The $112.5 billion available is down from $112.96 billion for the current budget.

See here for the previous update. I continue to hope that Congress will throw a boatload of state and local aid our way in the coming months, which will also help, but at least we’re not in truly dire territory. And bizarrely enough, there may be a silver lining in all this.

But advocates hope the pandemic, combined with the revenue crunch, could lead to an unlikely bipartisan agreement. Before the pandemic hit, Democrats saw a takeover of the Texas House as key for advancing the prospects of Medicaid expansion in the state. But as COVID-19 has ravaged the state economy and thrown even more Texans into the ranks of the uninsured, Democrats are guardedly optimistic this could persuade enough Republicans to put aside their political hangups and support expansion—even as Republican Attorney General Ken Paxton leads a national lawsuit to eliminate the entire Affordable Care Act.

Texas is one of 12 remaining states that have refused the federally subsidized Medicaid expansion, despite having the highest rate and largest population of uninsured residents in the country. Expanding Medicaid would cover 1 million uninsured Texans and bring in as much as $5.4 billion to the state, according to a September report by researchers at Texas A&M University.

State Representative Lyle Larson, a moderate Republican, voiced his support for expanding Medicaid soon after the election, pointing to six GOP-led states that have done so in the past three years. “It is a business decision,” Larson wrote on Twitter, noting that the move would help with the revenue shortfall and COVID-19 response, address rural hospital closures, and expand access to care. Dallas County Representatives Morgan Meyer and Angie Chen Button, both Republicans, pulled out razor-thin victories to keep their House seats after voicing support for some type of Medicaid expansion in their campaigns.

Even conservative state Senator Paul Bettencourt acknowledged that the fiscal crunch will force consideration of Medicaid expansion. “My back-of-the-napkin analysis shows that’s a $1.6 billion item, like that—boom!” he told the Dallas Morning News in September. “I’m pretty sure we don’t have that falling out of trees,” he said. “You can put Medicaid expansion up at the top of the list. There will be a debate.”

But there’s still plenty of staunch opposition. “For those that promote [expansion], I haven’t heard what they’re willing to cut,” state Senator Kelly Hancock, a Republican who chairs the Business and Commerce Committee, said in November. “It’s easy to talk about it until you have to pay for it, especially going into this budget cycle.”

As with casinos and marijuana, the smart money is always to bet against Medicaid expansion happening. But this is a bigger opening than I’ve seen in a long time, and while that’s still not saying much, it’s not nothing.

State budget situation not quite as awful as feared

Still bad, but could be worse.

Despite “historic declines,” state lawmakers will have more money to work with in the upcoming legislative session than Comptroller Glenn Hegar expected over the summer, he said Monday. But Hegar did not outline specifics as state coffers continue to suffer from the economic recession spurred by the coronavirus pandemic.

Sales tax revenues, by far the largest part of the state budget, fell by 4.8% in the second half of the 2020 fiscal year compared with the same stretch last year, Hegar said. It was a much softer hit than he anticipated, thanks to Texans staying home and spending money on “staycations instead of vacations.”

Other revenue streams, such as taxes related to alcohol, hotel occupancy, and oil and gas, were down more than 40% in the same period this year compared with last, Hegar told lawmakers Monday during a Legislative Budget Board meeting at the Capitol.

“Revenues remain down significantly relative to a year ago, and well below what we expected to collect when the Legislature wrapped up work on the budget in 2019,” Hegar said.

Legislative budget writers decide how much money will be allocated for large state expenses like how much school districts get, how well health care programs are funded, which transportation projects get built and what amount state law enforcement gets based on how much the comptroller says will be available during the next two-year budget cycle, which runs from September 2021 through August 2023. Hegar will likely unveil that number as the session nears.

Hegar, whose office is in charge of collecting taxes owed to the state of Texas, last formally updated lawmakers in July, when he wrote a letter to Gov. Greg Abbott and lawmakers projecting the state’s current two-year budget to be roughly $11.5 billion less than originally estimated. That would put the state on track to end the biennium, which runs through August 2021, with a deficit of nearly $4.6 billion, Hegar wrote in July.

A few points:

– Let’s hope Hegar is a better revenue estimator than Susan Combs was. Her epic misfire in 2011 led to far more cuts being made than were needed.

– There are and will be plenty of stories written about how this is now the time that the Lege will consider marijuana legalization or casino gambling, because those things generate revenue that could be used to help stave off the deficit. The bit about gambling has been trotted out reliably every cycle since at least 2003, and it has never been true, in large part because the people who oppose expanded gambling still oppose it in deficit situations, and they remain with sufficient power to block it. I expect the same to be true for pot – it will happen when and if there is sufficient political support for it, and the budget situation will not be a factor.

– Also, too, people like Greg Abbott and especially Dan Patrick don’t want new revenue sources. They are perfectly happy to cut things out of the budget. Deficit situations are great opportunities for them.

– We could avoid all this if there is a federal COVID relief package targeted at cities and states. That’s only going to have a chance of happening if Dems win the two Georgia Senate runoffs, and even then it may be dicey. But it is a thing that Abbott et al could advocate for if they chose.

– Oh, yeah, the Rainy Day Fund. We didn’t use it in 2011 because Rick Perry decided that the fund, which was explicitly set up for the purpose of blunting the effect of economic downturns – hence the actual name “Economic Stabilization Fund” – was actually for natural disasters instead. I feel pretty confident that Greg Abbott will declare that COVID is no reason to tap the fund, and in the absence of a legislative majority to dip into it, it ain’t happening. (It’s possible some small amount may be used, if budget writers feel sufficiently desperate, and the nihilist caucus can be tamed or bought off. Don’t bet on it, that’s my advice.)

We’ll know more in January. Hope for the best. The Chron has more.

DraftKings lawsuit tossed

Score one for the Astros.

Did not age well

A federal judge in New York mixed technical points of law with humor and theatrical flourishes in delivering a rousing defeat Friday to a group of baseball daily fantasy players who sued the Astros, Red Sox and Major League Baseball, claiming they were defrauded by the sport’s electronic sign-stealing scandal.

U.S. District Judge Jed Rakoff’s 32-page opinion in the case, filed by fantasy players from Massachusetts, California, Texas, Florida and California, begins by quoting from the 1956 film “High Society” and then dismantles the plaintiffs’ case while delivering a brief scolding to the Astros and Red Sox for their misdeeds.

While Rakoff, according to a 2014 magazine profile, is a Yankees fan who keeps a baseball autographed by Hall of Fame reliever Mariano Rivera on his desk, he nonetheless dismissed the fantasy players’ complaint as “verbose, rhetorical and conclusory” — conclusory referring to a conclusion that is unsupported by facts — in dropping the case against two teams that are hardly on any list of Yankees fans’ favorites.

Rakoff began by noting that baseball celebrates stealing, if only of a base, and noted that it also can “lead our heroes to employ forbidden substances on their (spit) balls, their (corked) bats or even their (steroid-consuming) selves.

“But as Frank Sinatra famously said to Grace Kelly in the 1956 movie musical ‘High Society,’ ‘There are rules about such things,’” the judge wrote. “One of these rules forbids the use of electronic devices in aid of the players’ inevitable efforts to steal the opposing catcher’s signs.

“In 2017, and thereafter, the Houston Astros, and somewhat less blatantly the Boston Red Sox, shamelessly broke that rule, and thereby broke the hearts of all true baseball fans. But did the initial efforts of those teams, and supposedly of Major League Baseball itself, to conceal these foul deeds from the simple sports bettors who wagered on fantasy baseball create a cognizable legal claim?

“On the allegations here made,” the judge concluded, “the answer is no.”

See here and here for the background. A copy of the judge’s ruling is embedded in the story. There are still other lawsuits out there for the Astros to contend with as a result of the sign stealing scandal, but this one is done for now. We’ll see if the plaintiffs try to appeal. ESPN has more.

MLB, Astros, Red Sox respond to DraftKings lawsuit over sign stealing

It’s motion to dismiss time.

Did not age well

As baseball’s electronic sign-stealing case joins the long list of sports-related court cases, attorneys for the the Astros, Red Sox and Major League Baseball all say that while fantasy sports bettors may be angered by rules violations, that doesn’t mean they’re entitled to monetary damages as a result of cheating.

All three parties filed responses late last week in a proposed class action case filed in a New York City federal court against the two teams and MLB over purported damages resulting from the 2017-18 sign-stealing scandal.

The two cases filed in New York have effectively been rolled into one case as bettors have joined forces against the MLB entities.

All three responses to the lawsuit filed by DraftKings customers cite court decisions in such past brouhahas as the New England Patriots’ “Spygate” case in 2010, boxer Mike Tyson’s ear-biting assault upon Evander Holyfield in 1997 and the New Orleans Saints’ “Bountygate” scandal of 2009-11 in asking U.S. District Judge Jed S. Rakoff to dismiss this case.
“Every court that has been faced with similar claims by disappointed fans … has soundly rejected such a claim recognizing that these types of issues are best resolved on the field and not in the courtroom,” attorneys for MLB wrote. “The same result should obtain here.”

In similar fashion, attorneys for the Astros wrote that fans “have no express or implied right to an event free of penalties, undisclosed injuries, rules violations, cheating or similar conduct. … There is no legal claim for a violation of a sports league’s internal rules.”

See here for the background, and here for more sign-stealing-lawsuit stuff. A copy of the Astros’ motion to dismiss is in the story. I don’t have anything to add to this, but if you’d like to hear an actual lawyer give real lawyer-like opinions and analysis of the various sign-stealing lawsuits and their merits, I recommend you listen to this episode of Effectively Wild, which will give you a firm footing on the subject. Courthouse News and the Associated Press have more.

More Astros lawsuits

This one was filed by a dissatisfied customer.

Did not age well

An Astros season ticket holder has filed suit in Harris County District Court against the ballclub, accusing the team of negligence, breach of contract and violations of the Texas Deceptive Trade Practices Act in conjunction with the 2017-18 electronic sign-stealing scandal.

The suit, filed Friday by Beaumont attorneys Mitchell A. Toups and Richard L. Coffman on behalf of season ticket holder Adam Wallach of Humble, seeks class action status for Astros full and partial season-ticket holders from 2017 through 2020 and damages in excess of a million dollars.

The Astros are accused of “deceptively overcharging (fans) for season tickets while defendants and their employees and representative knowingly and surreptitiously engaged in a sign stealing scheme … and secretly put a deficient product on the field that could result (and now has resulted) in severe penalties” from Major League Baseball.

As a result of the scheme, the lawsuit claims, season ticket holders are owed refunds of what attorneys say were inappropriate increases in ticket prices for the last four seasons. The suit also seeks treble damages for the Astros’ “knowing, willful, intentional, surreptitious, wrongful and unconscionable conduct.”

In addition, attorneys seek an order that would prevent the Astros from increasing season ticket prices for at least two years.

There were already two other lawsuits against the Astros over the whole sign stealing thing; this story notes yet another, a hand-written (!) lawsuit from a guy in Nevada who lost money in both 2017 and 2018 betting on the Dodgers to win the World Series. The day will come when this sort of story will end, but today is not that day. I Am Not A Lawyer, and I have my doubts that this will survive a motion to dismiss, but the Chron asked some actual lawyers, and maybe it can.

With three potential class action lawsuits pending against the Astros in Harris County courts, the scene is set for what attorneys say is a multi-layered, landmark legal battle that could test the wits and knowledge of lawyers, judges and jurors and perhaps extend beyond information disclosed in Major League Baseball’s report.

“This is a complicated mess,” said Talmage Boston, a Dallas attorney who has written two books on baseball’s history and is a member of the Texas Baseball Hall of Fame. “We have never seen anything like this before. There will be nothing easy about this case.”

Two additional lawsuits were filed against the ballclub Tuesday, bringing to at least seven the number of cases in state and federal court stemming from the electronic sign-stealing scheme in 2017-18 that resulted in Major League Baseball sanctions against the ballclub.

In the two latest suits, filed by the Hilliard Martinez Gonzales law firm in Corpus Christi, attorneys will seek authority to collect testimony that could go beyond details collected by the MLB probe that led to the firing of Astros manager A.J. Hinch and general manager Jeff Luhnow by team owner Jim Crane.

John Duff, an associate with the Hilliard firm, said attorneys for the ticket holders will attempt to question not only current and former Astros players and management but also MLB executives and players and managers from other teams, extending the boundaries of the MLB probe.

[…]

Sports-related lawsuits are not uncommon, with examples including the NFL’s “Spygate” affair with the New England Patriots and cases filed by disgruntled New Orleans Saints fans over officiating decisions that affected playoff games.

None of those cases proceeded to trial. Boston, however, said he believes the three Harris County cases, each of which seeks to represent season ticket holders who say they were defrauded by the Astros’ misdeeds, have a chance to proceed.

“The Astros will try to get them dismissed, but I think they will get teed up in front of a jury,” Boston said. “There are some compelling facts, and the evidence discovery will go deeper than anything we know in terms of what (MLB commissioner Rob Manfred) had in his investigation.

“It really is a can of worms.”

So who knows what might happen. Each case is in a different court, and there may be an effort to move them to federal court, which the plaintiffs will resist. I still have my doubts, but it sure would be interesting to see what the discovery process might uncover.

Lawsuit filed over sign stealing effect on fantasy baseball

This ought to be interesting.

Major League Baseball (MLB) teams secretly distorted player statistics and deprived fans of an “honest fantasy baseball competition,” a lawsuit filed by a fan alleges in the fallout to a sign-stealing scandal involving the Houston Astros and the Boston Red Sox.

The lawsuit, which named MLB, the Houston Astros and the Boston Red Sox as defendants, was filed in a Manhattan federal court on behalf of all fans who participated in DraftKings’ fantasy baseball contests, which plaintiff Kristopher Olson claimed were tainted by the sign-stealing scandal.

“At the very least, all of DraftKings’ fantasy baseball contests from early in the 2017 baseball season through the end of the 2018 regular season and into the 2019 season, were tainted by cheating and compromised, at the expense of DraftKings’ contestants,” according to the filing on Thursday.

DraftKings’ fantasy sports and betting operations are big business; it said in December it would go public this year in a deal putting its value at $3.3 billion.

The complaint claimed MLB has actively promoted fantasy baseball competition through its equity stake in fantasy sports and gambling company DraftKings.

CBS News and ClassAction.org have more details about the lawsuit if you want a deeper dive. I don’t play fantasy sports, but the basic idea is you draft a team, you designate which players “start” in a given game that is actually being played, and you get points based on the statistical performance of your players in those games. The idea here is that pitchers on fantasy teams who were designated to start against the Astros did worse than they would have because of the sign stealing, and since MLB knew about the sign stealing and didn’t do anything about it at the time, while they were also promoting and profiting from fantasy baseball, they were essentially defrauding the fantasy team owners. It seems a bit of a stretch to me, but there’s real money at stake. It’s also pretty clear that there’s more to the sign stealing story than what has been made public so far, and if this suit is allowed to proceed there’s a good chance we’ll learn a lot more about what really happened. So I’m very interested to see what happens.

House passes bill to legalize fantasy sports

Hey, what do you know?

The Texas House gave an initial stamp of approval Wednesday to a bill that would classify fantasy sports as games of skill, not of chance, that are therefore legal.

House Bill 2303 by state Rep. Joe Moody, D-El Paso, passed the chamber on a 116-27 vote. It still needs another vote from the House before it can be sent to the Senate for consideration. (Update, May 2: The House voted to give the measure final approval.)

Fantasy sports allows fans to draft real players from various sporting leagues to create a fictional team. The players’ real-time statistics are then compiled, and the team with the highest overall ranking wins. Fans can track their teams through websites or apps.

While critics say fantasy sports sites are hubs for illegal online gambling, others contend the games are based on skill and are therefore legitimate. Lawmakers have filed similar measures in the past, but to no avail.

Attorney General Ken Paxton issued a nonbinding opinion in January 2016 equating fantasy sports sites to online gambling, which is illegal.

“House Bill 2303 simply seeks to clarify state law and confirm that skill-based fantasy sports are legal and therefore not an act of gambling,” Moody said. “It’s very similar to what 19 other states in the country have done in recent years, and the United States Congress made this change in 2006.”

See here for the background. I hadn’t heard anything about this effort before this story was published, so it kind of came out of nowhere for me. Tiem is running down for bills to be heard in the Senate, and I have no idea where this is on the priority list. The odds always favor bills not getting passed. I’ll keep an eye on it.

“Eight Myths Out”

This year is the 100th anniversary of the “Black Sox” scandal, in which members of the 1919 Chicago White Sox were accused of conspiring with gamblers to throw the World Series. It’s a staple of baseball history and a cornerstone of the league’s strict anti-gambling rules since then, as well as the subject of a popular book and movie by the name “Eight Men Out”. It turns out, however, that the book, which was written in 1963, was incorrect on a number of fronts, and those factual errors, which have been since uncovered by further and more modern research, paint an inaccurate portrait of the story. Here’s a summary of new research from SABR, the Society for American Baseball Research, that lays out the case.

This is the central thesis of Eight Men Out: Charles Comiskey’s “ballplayers were the best and were paid as poorly as the worst,” as Eliot Asinof wrote. That couldn’t be further from the truth. We can’t climb into the heads of the Black Sox to know exactly why they threw the World Series. But the players themselves rarely claimed, as Asinof did, that it was because of Comiskey’s low salaries or poor treatment — and we now have accurate salary information to back that up. Newly available organizational contract cards at the National Baseball Hall of Fame show that the White Sox’s Opening Day payroll of $88,461 was more than $11,500 higher than that of the National League champion Reds, and several of the Black Sox players were among the highest-paid at their positions. If they did feel resentment at their salaries under the reserve-clause system, so did players from 15 other major-league teams. The scandal was much more complex than disgruntled players trying to get back at the big, bad boss.

One of the most dramatic scenes in Eight Men Out is when White Sox ace Eddie Cicotte tries to collect a $10,000 bonus he says Charles Comiskey promised him if he won 30 games. (In the book, this story occurs in 1917; in the film, 1919.) The incident is seen as the catalyst for Cicotte’s involvement in the fix — but there is no basis of truth to the story. Other White Sox players did have small performance bonuses in their contracts. For example, Lefty Williams was paid a $500 bonus for winning 20 games in 1919. In any event, Cicotte and Chick Gandil were already conspiring with gamblers to fix the World Series several weeks before Comiskey would have had the chance to renege on a bonus payment. And if Cicotte had pitched better in the pennant clincher, he would have earned his 30th win regardless. 

Arnold Rothstein, known as “The Big Bankroll,” was credited as the mastermind of the plot by his henchman Abe Attell in a self-serving interview with Eliot Asinof years later, but it may have still gone through even without the involvement of the New York kingpin. Fixing the World Series was a total “team” effort and the White Sox players did most of the heavy lifting. Chick Gandil and Eddie Cicotte, separately and together, first approached Sport Sullivan, a prominent Boston bookmaker, and Sleepy Bill Burns, a former major-league pitcher, to get the fix rolling. Then they began recruiting their teammates in several meetings before the World Series. Rothstein eventually did get involved, but he was far from the only underworld figure to play a role. 

There’s more, so go read the rest. There’s also a ton of links to follow for further reading if the subject interests you. As they say at the end, the Black Sox scandal is a cold case, not a closed case. There’s still more to learn about it, and our perceptions will likely continue to evolve as more evidence comes to light.

Time for the biennial annotation of gambling bills that will not pass

This one is creative, I’ll give it that.

Rep. Joe Deshotel

A Texas lawmaker has proposed subsidizing the state’s underfunded windstorm insurance and flooding assistance by building casinos in coastal counties.

State Rep. Joe Deshotel filed the bill on Dec. 7 to cover the cost of the Texas Insurance Agency by proposing to tax licensed casinos, Galveston County Daily News reported . The measure would give the Texas Lottery Commission the authority to issue six licenses to operate casinos across six counties.

The proposal would generate an 18 percent gaming tax of a casino’s revenue and use some of the money to ensure the windstorm association has sufficient capital to cover its insured deficits and operating expenditures.

Deshotel, who first filed a similar bill in 2015, said this latest iteration would send part of the tax to a flooding assistance trust fund. The governor’s office could then use the trust fund for emergency assistance during natural disasters like Hurricane Harvey.

“Just like the lottery, where a portion of funds go to public education, this is a need that’s underfunded,” Deshotel said. “If the lottery helps education, we can help with the problem of windstorm, which is disproportionately paid for by the coastal counties.”

It’s not just a bill – Rep. Deshotel has filed HJR 36, a “constitutional amendment authorizing the operation of casino gaming in certain coastal areas of this state by licensed persons to provide additional money for residual windstorm insurance coverage and catastrophic flooding assistance in the coastal areas”. There is a bill as well, HB494, since all constitutional amendments need enabling legislation to go with it. That means of course that this needs a two-thirds majority in both chambers to pass, and I don’t think I need to tell you what the odds are of that. Tying it to revenue for windstorm insurance is brilliant, but it still has to overcome the fact that some people oppose gambling in any form, and some people who support gambling only support it in the form of slot machines at horse-race stadia. A good idea, and perhaps a sign that we’ll see some Is This The Year That Texas Finally Expands Gambling stories (spoiler alert: no, this is not the year), but not much more than that.

Stadiums and sports betting

Sheryl Ring at Fangraphs adds another dimension to the SCOTUS sports betting decision story.

But there is another incentive for states to legalize sports betting aside from just basic tax revenue. We’ve talked about ballpark deals, particularly in the context of the Marlins. If states legalize betting at games and tax those bets, they can guarantee themselves a potentially large revenue stream out of the baseball stadiums they subsidize for teams — which suddenly makes ballparks a much more interesting investment for local governments. It wouldn’t be terribly surprising to see some ballparks look a little more like racetracks in the future, with the ability to place bets at the park itself. The idea of ballparks as entertainment centers, rather than simply sporting venues, is one which lends itself particularly well to this model.

But remember the potential for a patchwork we discussed. Let’s say that Pennsylvania and New York legalize sports betting and allow it at ballparks, and Missouri and Wisconsin don’t. Now you have a situation where big-market teams like the Phillies and Yankees have access to another revenue source, while smaller-market teams like the Brewers and Cardinals don’t. In an era of superteams, state laws could suddenly have a big impact.

On the other hand, sports gambling already happens all the time — and I’m not just talking about racetracks and off-track betting. I’m talking about websites like FanDuel. Many states, partly in response to PASPA, already either make gambling illegal or tightly regulate it, and that has led to a series of lower-profile cases arguing that daily fantasy sports are actually gambling — a proposition which courts have been debating for years. We’ve seen New York settle a case for millions of dollars against FanDuel and DraftKings, and this issue has arisen over and over again in courts throughout the Seventh Circuit, which covers Illinois, Indiana, and Wisconsin. This constant legal limbo has led to financial trouble for daily-fantasy companies. But the Supreme Court’s decision is likely to grant FanDuel and its industry peers a new lease on life.

Fangraphs is a baseball website so its focus is only on that sport, but there’s no reason to think that the “let’s have sports betting at sports venues” idea would be so limited. I mean, football is the 800 pound gorilla of sports betting, and I have to imagine the idea of creating that kind of enhanced revenue stream will have occurred to Jerry Jones and Bob McNair as well. If they can pitch the idea as being mutually beneficial to the local governments they have fleeced out of taxpayer dollars received stadium deals from, that could make for a strong lobbying team at the Capitol. I’m not saying this will happen – I don’t even know what the NFL’s official position on the SCOTUS ruling is – but it could happen, and if it does it will be a lot more formidable than the usual collection of casino and horse racing interests, which are usually at odds with each other. It’s worth keeping an eye on.

The “sanctuary cities” connection to the SCOTUS sports betting decision

The state’s rights aspect of this ruling may have other applications.

Seven of the nine justices — five conservatives and two liberals — backed a robust reading of the Constitution’s 10th Amendment and a limit on the federal government’s power to force the states go along with Washington’s wishes.

The federal anti-gambling law is unconstitutional because “it unequivocally dictates what a state legislature may and may not do,” Justice Samuel Alito wrote in his majority opinion. “It’s as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals.”

There is a direct link between the court’s decision in the sports betting case and the administration’s effort to punish local governments that resist Trump’s immigration enforcement policies, several legal commentators said.

“The court ruled definitively that the federal government can’t force states to enforce federal law. In the immigration context, this means it can’t require state or local officials to cooperate with federal immigration authorities,” said Ilya Shapiro, a senior fellow in constitutional studies at the libertarian Cato Institute.

Omar Jadwat, director of the ACLU’s immigrants’ rights project, said the ruling reinforced decisions from the 1990s, including one that struck down part of a federal gun control law that required local police to determine if buyers were fit to own handguns.

“It reiterates that the real thrust of the 10th Amendment and the principles of law in this area is that the fed government can’t tell the states or cities how to legislate,” Jadwat said. The amendment says that powers not specifically given to the federal government belong to the states.

See here for the background. This is only directly applicable to the feds attempting to force a local government to enforce immigration laws, not to the state trying to do the same to cities or counties. In other words, it’s not really on point for the SB4 litigation, but that doesn’t mean it won’t play a role somehow. At least, that’s my totally uninformed non-lawyer’s guess. Whatever else the case, putting some limits on Jeff Sessions is a good thing. Slate and ThinkProgress have more.

SCOTUS rules for sports betting

Gamblers rejoice.

The U.S. Supreme Court has allowed all states to legalize sports gambling. But a ban in Texas remains in place, and recent history suggests that state leaders will be in no rush to lift it.

The high court ruled on Monday that the Professional and Amateur Sports Protection Act, a 1992 federal law that barred states from legalizing sports gambling, violates the U.S. Constitution. The ruling was on a New Jersey case born out of the state’s efforts in 2014 to repeal a sports betting ban, allowing the state to regulate such behavior.

“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own,” Justice Samuel Alito wrote for the majority. “Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.”

[…]

In September, Texas Attorney General Ken Paxton sided with New Jersey in a 21-state brief on the case, arguing that PAPSA “impermissibly skews the federal-state balance” of power. But it seems that was an argument more for states’ rights to decide about sports gambling than for the practice itself.

PAPSA “tramples on state sovereignty,” Paxton said in November.

Paxton also wrote in a non-binding opinion in January 2016 that fantasy sports sites — which many consider more innocuous than traditional sports betting — are akin to gambling because they involve “partial chance.” The Legislature’s efforts to clarify those distinctions fell flat. State Rep. Richard Peña Raymond, a Laredo Democrat who led that charge, said he plans to file similar legislation again but doesn’t expect the court’s ruling to have immediate impact on his push.

See here for the background. Basically all this amounts to for Texas is one more thing for pro-gambling forces to advocate and have that advocacy fall on deaf ears. There’s no one in state leadership that favors expanded gambling. If this is an important issue to you, that’s where you need to start. The Associated Press and Deadspin have more.

Sports betting at SCOTUS

A case you might want to watch.

Internet gambling in the United States has been limited to just three states since it began in 2013, but it could soon get a big boost from an unlikely source: the U.S. Supreme Court.

Some gambling industry officials, regulators and analysts think that a favorable ruling by the high court in New Jersey’s challenge to legalize sports betting could also lead to an expansion of internet gambling.

“If we win sports wagering, online gaming will go to every state that adopts sports betting,” said David Rebuck, director of the New Jersey Division of Gaming Enforcement, who predicts a favorable sports betting ruling could help internet gambling “explode” across the nation. “As soon as sports wagering is legalized, online gambling will follow right behind it.”

The Supreme Court will hear arguments in New Jersey’s case on Dec. 4; a ruling could be weeks or months away. The state is taking aim at a 1992 law that forbids state-authorized sports gambling in all but four states that met a 1991 deadline to legalize it: Delaware, Montana, Nevada and Oregon. Nevada is the only state to allow single-game wagering.

The sports leagues oppose the lawsuit, arguing that legalized sports betting could taint the public’s perception of the integrity of their games.

[…]

Experts think that the sports betting legislative push would likely help expand internet gambling. David Schwartz, who runs the Center for Gaming Research at the University of Las Vegas-Nevada, says that offering online casino games and sports betting would go hand-in-hand online.

“It makes a lot of sense to offer sports betting over the internet,” he said. “Once you have the systems for letting people bet on sports in place, it isn’t a huge step to permit them to bet on casino games or poker as well.”

The law in question is the Professional and Amateur Sports Protection Act (PASPA). Texas doesn’t have a direct stake in this, just the same potential to allow online sports gambling if it wanted to if the plaintiffs succeed, but it does have a position, in favor of overturning PASPA.

Texas joined an amicus brief siding with New Jersey in favor of overturning the federal law, arguing that sports betting should be up to the states and not the federal government.

Attorney General Ken Paxton signed on to the brief, not to legalize sports betting, but to keep the federal government out of state decisions.

“PASPA is unconstitutional and tramples on state sovereignty,” Paxton told the American Sports Betting Coalition. “By ending PASPA, states can rightfully decide whether they want regulated sports betting or not.”

That means Paxton is on the opposite side of the debate from the White House. The U.S. solicitor general’s office has sided with the sports leagues and will join them for the court’s oral arguments Dec. 4.

But Paxton hasn’t shown any signs of wanting sports betting to be legal in the Lone Star State. In fact, the attorney general has been at odds with daily fantasy sports sites for years.

In 2016, Paxton issued an opinion that deemed paid fantasy sports sites to be illegal gambling.

If SCOTUS sides with the state of New Jersey and throws out PASPA, it would not change the debate about expanded gambling in Texas, but it would raise the stakes as there would be more things we could expand it to include. I could imagine there being more pressure on the Lege to take it up, but that doesn’t mean it would be any more successful than previous efforts. Like I said, worth keeping an eye on.

Poker clubs

I wish them luck.

Michael Eakman, a poker aficionado from a very young age, has hosted poker tournaments from around the country, but Texas gambling laws have long shut him out of his own state and his hometown of Houston.

This year, however, he opened the city’s first restricted membership-based poker club, joining several Texas entrepreneurs who believe they have found a way to circumvent those regulations and host everything from friendly poker games to competitive tournaments.

Unlike traditional gambling houses, Mint Poker in southeast Houston does not take a share of any gambled money, referred to as raking the pot. Instead, the club and similar ones across the state charge membership fees for players wanting to play in the club, a business approach that pushes the boundaries of legal gambling.

But so far, Eakman and other entrepreneurs in Austin and north Dallas haven’t drawn any unwanted attention from the Legislature or state regulatory agencies. Their efforts are gaining enough traction that they’re looking to expand. They have formed an association to represent their interest and are hoping to establish more clubs across Texas.

“In our conversations with the city attorney here in our jurisdiction, we made everyone aware of what we were doing before we even signed the lease,” Eakman said. “I certainly don’t want to challenge anyone to bring a court case, but I think at the end of the day we’re handling this by being proactive instead of reactive is the way to do this. … There are no regulations and guidelines other than the narrow scope of a very vague law.” Bingo, horse and dog racetracks, Native American casinos and even the state-run Texas Lottery all provide outlets for Texans trying to test their luck.

[…]

At least three other membership-based poker clubs have opened in addition to the Houston business: Texas Card House with two locations in Austin, and Poker Rooms of Texas in north Dallas. They recently joined forces as the Texas Association of Social Card Clubs, and have begun working with longtime utilities lobbyist Tim VonKennel to represent them within the Texas Legislature, Eakman said.

VonKennel is the father of Texas Card House owner Sam VonKennel, and said he helped organize the Texas Association of Social Card Clubs to increase legislators’ awareness of membership-based poker clubs in Texas.

“The Legislature hasn’t really seen it yet because it hasn’t really existed,” VonKennel said. “As they pop up, I want to make sure the Lege is aware of them. What I would really like to do is get these guys to become licensed with the Texas Department of Licensing and Regulation, and that way they’re absolutely certain they’re on the right side of the law.”

Sen. Jose Menendez, a Democrat from San Antonio, said he was involved with the creation of membership-based poker in Texas, encouraging Eakman to devise a business model that could clear the hurdles of Texas gambling laws when they met at a poker tournament.

“I think it’s a little hypocritical that we can have a state lottery or horse racing in texas but we can’t let people play poker,” Menendez said.

Basically, as far as I can tell, these things are legal until proven otherwise, which is to say until some law enforcement agency makes an arrest, or until Ken Paxton issues an opinion. The story above appeared a few weeks ago and fell into my drafted-but-never-got-around-to-publishing pile, then I saw this AP story and dug it back up. As noted, while the state has not given an opinion on this sort of thing, local law enforcement has, at least in some places.

On Sept. 7, Dallas police executed a search warrant at CJ’s Card Club on Walnut Hill Lane. Police filed a report alleging the keeping of a gambling place. The case remains under investigation. A department spokeswoman declined to release any further information.

The club has since closed, its website and Facebook page have been shut down, and its operators could not be reached.

Around that same time, Poker Rooms of Texas closed after Plano police questioned the legality of that operation. The club opened late last year in a strip center storefront on Parker Road off Independence Parkway. It reportedly attracted scores of players each night.

Its website states that it “is working with local authorities to resolve operational issues.” Its owners did not return messages.

The website for Lucky’s Card Room in Fort Worth says the club is temporarily closed while it works on a new location. And the site for TopSet Poker Club in Plano stated that its grand opening, formerly set for September, has been delayed while it considers options in light of problems identified at similar businesses.

Big Texas Poker Club opened in late August in a commercial building off Jupiter Road in Plano. Owners Fred and Heather Zimmerman said they did their homework to ensure that they would be legal. Three weeks later, they shut down to avoid arrest.

“This is a legitimate business, and it’s better than illegal poker rooms,” Fred Zimmerman said.

The couple said they were transparent about their club as they sought a city permit to open. Only after they started gaining members did they receive “threatening letters” from police stating that their business model violated the state’s gambling law.

Plano City Attorney Paige Mims said certificates of occupancy are about the fitness of a building and have nothing to do with the activity inside. As for whether a private card room can operate, she said the city does not give legal advice.

Police spokesman David Tilley declined to go into details about his department’s conversations with the poker rooms. “Gambling is illegal in the state of Texas,” he said.

In other words, if you have a favorite spot to play Texas Hold’Em, don’t get too attached to it. I should note that there was an effort in the 2009 legislative session to carve out a legal exception for poker, but it didn’t make it. If there’s been a similar effort since then, I’m not aware of it; that one had a social media/PR push behind it and there’s been no such thing in subsequent sessions. The legislator who filed the pro-poker bill back then was then-Rep., now-Sen. Jose Menendez, who as you can see still supports the idea. Like I said, I wish these guys luck. I’m not a poker player myself, but I see no reason not to let ’em play.

State sues Alabama-Coushatta tribe over casino

Here we go again.

A new legal salvo was fired this week in the state’s long-running battle against Indian gambling with a filing in federal court that seeks to close the gaming hall on the Alabama-Coushatta Reservation.

A motion for contempt and injunctive relief was filed Monday by Attorney General Ken Paxton, claiming that the Naskila Entertainment Center, which has offered electronic bingo since reopening in May, violates an existing court injunction.

It asks that the small East Texas tribe be ordered to halt the gaming operation, remove all gaming equipment and pay a civil penalty of $10,000 a day from June 2 until all gaming ceases.

On Tuesday, the log cabin-style hall on the 10,000-acre reservation in the Piney Woods east of Livingston was still open to the gaming public.

“We definitely think we’re in the right. The federal government and the National Indian Gaming Commission gave us the authority, so we think we’re on good legal grounds,” said tribal spokesman Carlos Bullock after conferring Tuesday with members of the tribal council.

[…]

The legal landscape for the Tigua and Alabama-Coushatta appeared to improve last year when both the Interior Department and the NIGC issued administrative opinions that the two small tribes could offer certain types of gaming.

But earlier this year, the state won a marathon legal battle with the Tigua when a federal judge in El Paso ruled that the tribe’s entertainment center was really a thinly disguised gambling hall.

The Tigua now plan on offering permitted bingo-hall-style games that are legal in Texas.

In ordering the Tigua to cease offering “sweepstakes,” U.S. District Judge Kathleen Cardone also ruled that federal case law, which prohibited the gaming, trumped the opinions of the two federal agencies.

See here, here, and here for some background. This action by the state was completely expected, given past litigation and the noises the AG’s office had been making since the casino reopened. Both the Alabama-Coushatta and the Tigua tribes had tried again with their casinos under new administrative guidelines from the National Indian Gaming Commission, but the subsequent loss in court by the Tigua does not bode well for the Alabama-Coushatta. We’ll see how it goes.

Alabama-Coushatta casino opens

Get your gamble on, y’all.

Fourteen years after it was forced to close under threat of legal action by the state, the tribe’s modest casino reopened three weeks ago with little fanfare but great expectations.

Now, the vast, once empty parking lot outside the Naskila Entertainmnet Center is packed with cars by noon, as gamblers from around East Texas roll in to play electronic bingo under a vaulted ceiling of knotty pine.

The 365 blinking, beeping machines, with names like Gecko Wild, Moo La La and Double Hotness, draw players long starved for local gaming, and thus far, the reviews – even by folks losing money – are five-star.

[…]

More than 240 Indian tribes around the country offer certain types of gambling under the oversight of the National Indian Gaming Commission. In Texas, only the Kickapoo in Eagle Pass have done so without a legal challenge from the state.

The crucial breakthrough came late last year, when two federal agencies ruled that national Indian law superseded Texas’ authority to block either the Alabama-Coushatta in East Texas and the Tigua in El Paso from offering gaming.

Almost three decades earlier, the two small tribes had agreed to accept a ban on gaming as a condition of becoming federally recognized tribes. The Kickapoo received recognition without this condition and have offered gambling since 1996. They now have 3,200 machines in a large modern casino-hotel complex.

The state had sued the Tigua and the Alabama-Coushatta, forcing each to close its casino in 2002. While the Tigua have been in near constant litigation since, the Alabama-Coushatta adopted a less confrontational posture.

When both the U.S. Department of the Interior and the NIGC decided late last year that both have the right to offer Class II gaming, including bingo, electronic bingo and certain card games, the Alabama-Coushatta were quick to act.

What if anything the state now intends to do remains unclear. A spokesman for Attorney General Ken Paxton last week declined to comment on the issue.

See here and here for some background. Past statements from the AG’s office have suggested that they do intend to do something about this. It’s not like they have a great deal of respect for federal laws, after all. So if you want to sample the fare at the new Alabama-Coushatta casino, I’d advise doing it sooner rather than later.

What are the chances that Hillary could carry Texas in November?

According to the bookies, not as bad as you might think.

Speculating that Texas will go blue in the near future has a certain trollish quality. In fact, it’s also been a downright spectacular way to sound like you don’t know much about the Texas electorate in years past. Wendy Davis’s sound defeat in the 2014 gubernatorial election proved that the Texas Democratic Party isn’t ready to compete, and bringing the prospect of a blue state up at all seems almost futile. If you’re confident that Texas is going to stay a deep shade of red in 2016 and for years into the future, well, recent history hasn’t offered much evidence to the contrary.

But for the first time, you can actually put your money where your mouth is in the debate. PaddyPower, the Irish gambling site, recently released odds for five different swing states, and users can bet on which party’s candidate will win the state’s electoral votes in the general election. The list includes four familiar states to poll-watchers (North Carolina, Iowa, Florida, Ohio), and one that bookies tend to stay far away from: Texas.

To be certain, the odds that Texas goes blue in November aren’t good. At 14/1, they’re slightly better than the odds the site offers for the Astros (15/1) or Rangers (16/1) winning the World Series. They’re all in the game, but none of them are particularly likely propositions (even if Hillary Clinton selects Dallas Keuchel as her running mate). And the other side of the bet—putting your money down that Texas stays red in November—is even more intense, where gamblers will have to put down $100 to make a dollar.

That discrepancy relates to the real goal of betting sites. They don’t want to predict with scientific precision the likelihood of a given event coming to pass (stick with Nate Silver for that), but rather find a balance that gets a roughly equal amount of action on both sides of a bet, and that will help them avoid losing a fortune in the face of an unpredictable situation. So they’re conservative on both sides here—they need one person to see Texas going for the GOP in November as enough of a sure thing that they’ll put down $100 to win a dollar for every seven people who think that it’s worth a buck to bet that Texas could be a surprise pick to go blue.

But the mere fact that a gambling site sees the chances of a blue Texas as something worth offering odds on is surprising.

[…]

All of this is to say that the odds right now favor a November election that puts Hillary Clinton and Julián Castro up against Donald Trump and John Kasich. Clinton is well-liked in Texas—she received nearly a million votes in the primary—and Castro is a native son who left his tenure as the leader of San Antonio to join Obama’s cabinet, which suggests that he’d add a fair bit of popular support to the ticket. Trump, on the other hand, is not particularly beloved by Texas Republicans. Despite the fact that nearly twice as many people voted in the GOP primary as voted in the Democratic primary, Clinton pulled nearly 200,000 more actual votes than Trump did in the state on Super Tuesday.

When you factor all of that together, it doesn’t necessarily add up to “Hillary Clinton is going to win Texas in November,” of course. But we’re just talking about the odds here, and 14/1 doesn’t sound so crazy with all of that in mind.

You can go here to put your money down on this proposition, if you’re so inclined. It feels a tad bit optimistic to me, and I’m a pretty optimistic guy, but hey, it’s only money.

It’s not easy going green

And by “going green” I mean legalizing pot, at least in Texas.

Zonker

Advocacy groups and lawmakers say marijuana policy reform in Texas could be the fiscally responsible thing to do in light of the state’s decreasing oil and gas revenues.

Texas legislators should look to marijuana policy reform to save, and even make, money in the face of looming budget shortfalls, said SXSW panelist Phillip Martin of Progress Texas, in front of what he called the “wake and bake crowd” Tuesday morning.

“It’s not an ideological barrier,” said Martin. “Anything that’s going to move is going to move because of money.”

The “Turn Texas Green” panel brought legislators and advocates together to to discuss how the Lone Star State could legalize pot for medical or even recreational use.

Zoe Russell, from the Houston nonprofit Republicans Against Marijuana Prohibition (RAMP), said some “establishment” Republicans already “see the writing on the wall” with decriminalization policies at the local level. In 2015, Harris County’s Republican DA implemented a “First Chance” policy allowing non-violent offenders with small amounts of marijuana to be ticketed, rather than arrested.

But so far, few statewide elected officials have been willing to put their names on marijuana legislation, Russell said.

“Behind closed doors, they’re really supportive of ideas like this,” Russell told the audience of around 15 or so. “[But] they’re scared of their shadow.”

As Texas’ oil and gas revenues drop dramatically, panelists said the state’s money woes may override the squeamishness many legislators have about legalizing weed.

With all due respect – and I have a lot of respect for Phillip Martin and Progress Texas – the argument that Texas could make some money by legalizing pot and that this would help with the current budget situation is a complete nonstarter. I say this because advocates for expanded gambling, both the slot-machines-at-horse-tracks and the casinos groups, have been making this same argument for well more than a decade and during the budget crunches of 2003 and 2011, and they have nothing to show for it. If there’s one thing we should have learned from those past experiences, it’s that not only is the Republican leadership in this state unreceptive to proposals that would add new revenue streams in Texas, they are actively hostile to them. They’re not interested in more revenue. Budget crunches are to them opportunities to slash spending. It really is an ideological barrier. I don’t see that changing until the leadership we have in Texas changes. I wish that weren’t the case, but I see no evidence to suggest otherwise.

It also pains me to say that even under the most optimistic scenarios, the amount of revenue Texas would likely gain from legalizing and taxing marijuana is way too small to have any effect on a real budget shortfall. The state of Colorado took in $125 million in pot tax revenue in 2015, which sounds like a lot until you remember that the Texas budget is roughly a thousand times bigger than that for a year. This is like saying that Colorado pot revenue is a penny to Texas’ ten dollars. Putting this into a more workable context, $125 of pot tax revenue represents about two percent of the $5.4 billion that was cut from public education in the 2011 budget. I’m the first to agree that in a crisis situation, every little bit helps. The point I’m making is that this really would be a little bit.

Which is not to say that there are no economic arguments to be made for at least loosening pot laws, if not outright legalizing it. The case that Texas will spend a lot less money, at the state and county level, with smarter pot laws has some traction and a chance to gain ground. You’re still going to have to overcome the fear that not punishing all these potheads will lead to a spike in crime – it won’t, but you’re going to have to convince some people of that – as well as the strong distaste a lot of people have for pot and the people who indulge in it, but the prospect of spending less will help. (You also have to overcome the fact that some of our legislators are complete idiots, but that’s more of an electoral issue.) Here I think the short-term potential is greater at the county level, since as Harris County has demonstrated some of what can be done is a simple matter of discretion on the part of one’s police department and District Attorney, but the Lege is where it’s at for the longer term, and the real gain. I wish everyone involved in this fight good luck, and I hope we all remembered to vote for candidates who will pursue smarter laws and strategies regarding marijuana in the primaries.

Paxton opines against daily fantasy sports sites

I feel confident saying this will be tested in court.

While placing bets on fantasy sports sites might involve skill, there is still an element of chance that equates such leagues with illegal gambling in Texas, Attorney General Ken Paxton said in a nonbinding opinion released Tuesday.

The “odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling,” Paxton said in the nine-page opinion. But “participation in traditional fantasy sport leagues that occurs in a private place where no person receives any economic benefit other than personal winnings and the risks of winning or losing are the same for all participants does not involve illegal gambling.”

In November, state Rep. Myra Crownover, R-Denton, asked the attorney general to weigh in on whether fantasy sports sites such as DraftKings.com and FanDuel.com were legal in Texas. The request came days after New York’s attorney general declared such sites to be illegal gambling.

[…]

In a statement Tuesday, Crownover said she requested the opinion to clarify the law on fantasy sports sites. “It is our responsibility to try to make sure no business is profiting from illegal activity in Texas.”

As you might imagine, the sites were none too happy about this.

Daily fantasy sports site DraftKings said it intended to keep operating in Texas, disagreeing with Paxton’s interpretation of the law and his description of how the games work.

“The Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill,” said a statement by Randy Mastro, counsel to DraftKings.

“The Attorney General’s prediction is predicated on a fundamental misunderstanding of [daily fantasy sports]. We intend to continue to operate openly and transparently in Texas, so that the millions of Texans who are fantasy sports fans can continue to enjoy the contests they love,” said Mastro, who disputed the description of an entry fee as a cut.

[…]

Dallas Mavericks owner Mark Cuban has invested in Fantasy Labs Inc., a platform of proprietary daily fantasy sports data, tools and analytics. He slammed Paxton’s legal opinion on Twitter, calling it “a disappointment.”

“You certainly don’t represent the views of Texans,” tweeted Cuban, who is due to keynote the Fantasy Sports Trade Association’s Winter Conference in Dallas on Wednesday.

Paxton’s opinion came despite a flood of emails to his office supporting the games. His office received 18,429 emails and 339 calls, the majority of them in favor of the games, a spokeswoman said Tuesday.

I would agree that there is skill involved in playing fantasy sports, at least if one wants to be any good at it, but one could also argue there’s skill involved in horse racing or playing blackjack. There’s obviously a big element of luck involved as well, so where does one draw the distinction? I have zero interest in these daily fantasy game sites, so I’m not qualified to say where that line is, but it’s clearly subjective. I look forward to the inevitable lawsuit.

One more point of interest, from the DMN last week.

When news broke that Texas lottery officials were looking into fantasy sports and casino games in other states late last year, the lottery agency said its exploratory trips were no big deal. Just a fact-finding mission to gather information for lawmakers, a spokeswoman said.

What the agency didn’t say was that for months, Texas Lottery Commission Executive Director Gary Grief had been aggressively working to get in on the billions of dollars flowing into fantasy sports. His efforts came as the games became the focus of legal questions around the country — and despite conservative state leaders’ long-standing aversion to any expansion of gambling here.

More than 400 pages of emails, obtained by The Dallas Morning News under Texas public records laws, directly contradict the agency’s contention that it was only considering traditional lottery draw and scratch-off games. The records include discussions with fantasy sports lobbyists and show that Grief wanted a contract with DraftKings, one of two companies at the center of a national controversy over the games.

He prodded his staff to quickly nail down a plan to get Texas in on the action. And when an insider betting scandal erupted in the industry, Grief embarked on a plan to bring the games — which some consider an illegal form of gambling — under the lottery commission’s umbrella.

Winston Krause, chairman of the five-member Lottery Commission, said that Grief explored the issue at the behest of a lawmaker whose name he couldn’t recall. When Gov. Greg Abbott learned from a News report that Grief and agency staffers had traveled to Delaware to investigate its sports betting operations, he ordered the commission to end its dalliance. Suddenly, Krause said, the lawmaker lost interest.

“The bottom line is, no one in that organization wants to expand the footprint of gambling in Texas. Nobody,” Krause said.

Lottery Commission spokeswoman Kelly Cripe declined repeatedly to elaborate. Grief, in a written statement, said the agency has stopped its efforts. He declined multiple requests for an interview, and the agency has challenged The News’ requests for additional documents on the matter.

Nothing at all curious about that. Who can keep track of all these legislators, anyway? Read the whole thing. This was separate from the request for Paxton’s opinion, but it’s definitely relevant. ESPN, Trail Blazers, Texas Monthly, and the Press have more.

The forthcoming fight over the Alabama-Coushatta casino in Texas

I missed this report from November.

After more than 13 years, the feds say the Alabama-Coushatta’s casino in Livingston can finally reopen. And here’s the kicker: according to the federal government’s reasoning, the tribe’s casino should never have been forced to close in the first place.

[…]

Recently, the tribe asked the Department of Interior and National Indian Gaming Association to clarify their legal standing, gambling-wise. In October, the Interior Department and the National Indian Gaming Commission decided that the Alabama-Coushatta (along with the Tigua, a tribe located on a reservation near El Paso) do actually have the right to offer bingo and electronic bingo on the reservation, meaning the Alabama-Coushatta will soon be open for business.

The Interior Department warned both the Alabama-Coushatta and the Tigua to be careful and line everything up with the National Indian Gaming Commission, considering the state isn’t likely to be happy with this development. Bullock says they’re intent on doing everything by the book. “The state hasn’t responded to us yet. I can’t say what their position is. I can’t anticipate what they’ll do, and we’re not going to. We’re going to do what the federal government allows us to do and that’s all.”

At the end of the day, the casino re-opening will be a game-changer for the people living on the reservation. There’s no firm opening date, Bullock says. The casino has been standing empty and acting as a sort of community center for more than a decade, but the tribe has already voted unanimously to pull money out of their permanent funds to get the casino ready.

The story delves into the background of this longstanding battle, the tl;dr version of which is that the casino that was opened in 2001 was shut down in 2002 thanks to the efforts of then-AG John Cornyn, with some court skirmishes and behind-the-scenes maneuvering since then. I’ve got a couple of posts on the more recent activity here and here; if you have a long memory and a morbid curiosity, see also here for one of the side attractions of the original fight, which went beyond Texas and demonstrated was an unscrupulous dirtbag Ralph Reed is.

So does this mean there’s casino gambling coming to Texas next year? I wouldn’t count on it just yet, because the state of Texas isn’t going to just let it happen. This story from last week explains (the lawsuit in question stems from the original fight).

Meanwhile, U.S. District Judge Kathleen Cardone issued an order requiring the Tiguas and other parties to the lawsuit to file their briefs on what the federal agency decision means.

On December 9 Paxton filed a brief on the Tiguas case — the tribe has been in a legal fight over the right to gamble for more than 20 years now — on the issue. Predictably he came down against it, contending that “no federal agency interpretation can contradict Congressional intent.”

The 26-page brief referenced 25 court cases and dug into eight “issues” that concerned the state, with most of the issues tugging at whether or not the National Indian Gaming Commission and the Department of the Interior had the right to even issue their opinion on gaming.

Paxton was pretty clear about what he thought:

“If Congress has explicitly left a gap for an agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute … Here there is no gap. The only issues presented are legal issues for this court. Congress delegated no power or authority to either federal agency to interpret laws or invalidate portions of federal law.”

Outside of the brief Paxton has officially stayed silent on the question of the Alabama-Coushatta. “At this point, we will not be providing any comment,” Spokeswoman Teresa Farfan replied via email in response to our questions.

However, the Alabama-Coushatta come up twice in Paxton’s brief. The first mention comes right at the start:

“Should Texas be required to join the Alabama-Coushatta Tribe to this litigation … without any evidence that the Alabama-Coushatta Tribe is currently violating the Restoration Act?”

Then, at the end of the brief he answers his own question:

“Since this litigation was filed to enjoin and hold accountable the Pueblo defendants for their continued violation of federal law embodied in the Restoration Act, there is no need to … add third-party tribes which, unlike the Pueblo defendants here, are not currently violating federal law.”

Translation: The Alabama-Coushatta aren’t currently violating the federal law so they won’t be in trouble with the state until they actually do something to violate the federal law, like, you know, maybe reopening their casino in 2016.

So yeah. I’d continue to make plans to visit Louisiana or Vegas to get my gamble on for the near future. The Alabama-Coushatta may eventually prevail, but if so it won’t be in 2016.

Pete Rose remains banned from baseball

No argument from me.

Rob Manfred, the commissioner of Major League Baseball, has decided not to lift the permanent ban imposed on Pete Rose more than a quarter-century ago, meaning the player with more hits than anyone else in the sport’s history will continue to be kept out of the Hall of Fame.

The decision by Mr. Manfred, who succeeded Bud Selig as commissioner last January, was announced on Monday after The New York Times reported that the ban would be kept intact.

Mr. Manfred’s decision comes less than three months after he met with Mr. Rose, 74, at Major League Baseball’s headquarters on Park Avenue in Manhattan to discuss the ban, which was first imposed in 1989, when baseball concluded that Rose had bet on baseball games while managing the Cincinnati Reds and that some of the bets had been placed on his own team.

In the report, which was released on Monday and accompanied his decision to uphold the ban, Mr. Manfred said Mr. Rose informed him at the September meeting that he continues to bet on baseball, which he can legally do in Las Vegas, where he lives.

That disclosure clearly concerned Mr. Manfred, as did what he described as Mr. Rose’s inability, at the meeting, to admit that he not only bet on games as a manager but also as a player.

“In short,’’ Mr. Manfred concluded in the report, “Mr. Rose has not presented credible evidence of a reconfigured life either by an honest acceptance by him of his wrongdoing … or by a rigorous, self-aware and sustained program of avoidance by him of all the cirucmstances that led to his permanent ineligibility in 1989.”

Yeah, Pete Rose, who was banned for life for violating the very clear and simple rule not to bet on baseball, still bets on baseball, and lied about betting on baseball while he was still a player. Any questions?

I’ll say what I said before, that I’d be okay with the idea of Rose being posthumously elected to the Hall. In terms of his on-field accomplishments, he’s a no-brainer. Put Shoeless Joe in with him – it’ll surely have been a century since the Black Sox scandal by the time this would be relevant. Along those same lines, I’d love to see everyone knock off the stupid arguments about PEDs and just evaluate everyone’s cases on their statistical merits. Until then, Rose can continue to not learn from his mistakes. Joe Posnanski, Craig Calcaterra, and Jayson Stark have more.

The latest Pete Rose revelations

He bet on Reds games while he was still a player, despite his loud assertions to the contrary.

For 26 years, Pete Rose has kept to one story: He never bet on baseball while he was a player.

Yes, he admitted in 2004, after almost 15 years of denials, he had placed bets on baseball, but he insisted it was only as a manager.

But new documents obtained by Outside the Lines indicate Rose bet extensively on baseball — and on the Cincinnati Reds — as he racked up the last hits of a record-smashing career in 1986. The documents go beyond the evidence presented in the 1989 Dowd report that led to Rose’s banishment and provide the first written record that Rose bet while he was still on the field.

“This does it. This closes the door,” said John Dowd, the former federal prosecutor who led MLB’s investigation.

The documents are copies of pages from a notebook seized from the home of former Rose associate Michael Bertolini during a raid by the U.S. Postal Inspection Service in October 1989, nearly two months after Rose was declared permanently ineligible by Major League Baseball. Their authenticity has been verified by two people who took part in the raid, which was part of a mail fraud investigation and unrelated to gambling. For 26 years, the notebook has remained under court-ordered seal and is currently stored in the National Archives’ New York office, where officials have declined requests to release it publicly.

[…]

Dowd, who reviewed the documents at Outside the Lines’ request, said his investigators had tried but failed to obtain Bertolini’s records, believing they would be the final piece in their case that Rose was betting with mob-connected bookmakers in New York. Dowd and his team had sworn testimony from bookie Ron Peters that Rose bet on the Reds from 1984 through 1986, but not written documentation. Dowd also had testimony and a recorded phone conversation between Bertolini and another Rose associate, Paul Janszen, that established that Bertolini had placed bets for Rose. But Dowd never had the kind of documents that could cement that part of his case, especially in the eyes of fans who wanted to see Rose returned to Major League Baseball.

“We knew that [Bertolini] recorded the bets, and that he bet himself, but we never had his records. We tried to get them. He refused to give them to us,” Dowd said. “This is the final piece of the puzzle on a New York betting operation with organized crime. And, of course, [Rose] betting while he was a player.”

See here for the documents in question, and be sure to read the whole story. The main moral here is that one should never believe a word Pete Rose says.

I recommend you read Craig Calcaterra’s Q&A about what this all means. Remember that Rose has asked Commissioner Rob Manfred to review his case and reconsider the lifetime ban against him. I’ll qute from the last bit of Calcaterra’s discussion:

Q: Does this affect his Hall of Fame case? Should it?

A: He has no Hall of Fame case now, because people who are banned are not allowed to be on the ballot. If and when he is reinstated, he will be subject to the same sort of scrutiny any player is when considered for the Hall. Part of that scrutiny is the so-called character clause. As it was, some voters were probably going to hold Rose’s gambling history against him and make his Hall case, if he ever gets one, tougher than it should be. With new evidence that Rose’s lying didn’t end years ago when he finally copped to betting on baseball, it may turn a few more minds against him.

Personally speaking, I think the character clause is dumb and I’d put Rose in the Hall immediately. There are a lot of liars and cheats in there. None of them is the all-time hits leader.

Q: Got anything else, smart guy?

A: Just one observation: Pete Rose politics are dumb. There is no reason why people who think he should be back in the game or in the Hall of Fame have to believe he’s a great guy or that he’s a truth-teller. Those are not mutually-exclusive categories. Yet for years, including the past ten minutes, I have heard people believe that it is. That if you think Rose is a liar, you MUST be against him for all purposes, or that if you think Rose should be reinstated and enshrined in Cooperstown that you MUST believe everyone is out to get him and that he’s a choir boy.

That’s silly, of course. Rose is a liar. That’s pretty clear. He got a punishment he richly deserved and, because of the nature of that punishment (i.e. it’s permanent) — Major League Baseball is doing him a gigantic favor by even reviewing his case again. If they told him to pound sand, there wouldn’t be a great argument for him or any of his partisans to lodge in his favor. But you can also, like I do, think that Rose is a liar who should be in the Hall of Fame. And one that, at this point in his life, could be reinstated without much harm happening. It would make a lot of people happy to boot.

This new news — or this new corroboration of old news and the bad P.R. that attends it — could be bad for that reinstatement case. There’s no getting around that unless and until MLB says it doesn’t care.

As you know, I’ve long been in the anti-Rose camp, mostly because 1) baseball’s rules about gambling are simple and clear; 2) Rose agreed to the punishment he now serves; and 3) he’s been lying about it for a quarter of a century. I mean, if he’d ever shown any sign that he at least understood what he did was wrong and why, I’d have been less of a hardass about it. Be that as it may, I can see where Calcaterra is coming from, and I’d be willing to go along with it on two conditions. One, that any consideration for Pete Rose in the Hall of Fame happens posthumously, and two, that every self-appointed moralist with Hall of Fame voting privileges agrees to get over the whole ridiculous PED thing already. Put in everyone whose as-is numbers say they deserve it, and tell the unvarnished truth about them on their plaques. Then we can move on to less controversial things, like the DH and improving the pace of the game. Who’s with me on this?

No gambling expansion this session

This should not come as a surprise to anyone.

Casino1

It’s a sure bet that when Texas lawmakers convene every two years, legislation will be proposed to expand gaming in the state.

This year, there are nearly a dozen pieces of legislation covering casino games, slot machines and eight-liners. And just like each time before, the bills face long odds of passing.

Prospects are so dim that the Texas Gaming Association isn’t bothering to actively support a bill drafted on its behalf, as it has done in each of the approximately 10 previous legislative sessions, Chairman Jack Pratt said. The association represents casino-resorts operator Las Vegas Sands Corp.

“We have nothing going on because we know that there is no possibility of getting anything passed in the Legislature (the way) it’s structured there currently,” Pratt said. “We just didn’t want to waste our time nor our money.”

Pratt was referring to the makeup of the Texas Legislature. After last fall’s elections, Republicans continue to outnumber Democrats by about 2-1. But the majority is viewed as the most conservative in recent memory. Lt. Gov. Dan Patrick also has come out against expanded gaming.

[…]

The Texas Gaming Association has endorsed casinos at large destination-resort properties that would cost $2 billion to $3 billion each to construct, Pratt said. It does not favor adding slots as a way to rescue struggling racetracks, including Retama Park in Selma.

“There’s no reason for us to bail them out,” Pratt said. “They’ve just got a poor business plan. They ought to bury it and go on.”

Andrea Young, president of Sam Houston Race Park, disagreed. Texas racetracks have been competing on an “unlevel playing field” with Louisiana and Oklahoma racetracks that allocate gaming money to purses — the money awarded to the highest finishers. The purses at those tracks are higher than those in Texas, and thus can attract better horses. Sam Houston is partly owned by racetrack and gaming giant Penn National Gaming Inc.

While Young conceded there’s not much momentum for gaming legislation, she said that hasn’t stopped Sam Houston Race Park from backing legislation. “Doing nothing is not really an option for us,” she said.

You can see in the paragraphs above one reason why gambling expansion never came close to passing in previous sessions when the conditions might have been more favorable. This session, I heard basically nothing from the usual suspects of gambling expansion. Not surprising, given tax cut mania and the other priorities expressed by the new gang, but different. As Pratt says elsewhere in the piece, you can expect these guys to be back again some day. Their economic argument, whatever you think about it, remains the same in good times and in bad. Maybe in 2017, if oil and gas prices are still low, it will have some sway. Just not this time.

Bill filing deadline has passed

Believe it or not, we are almost halfway through the legislative session, and we have now passed the point where new bills can be filed.

130114152903-abc-schoolhouse-rock-just-a-bill-story-top

Racing to beat a deadline for filing bills, state lawmakers on Friday submitted hundreds of measures on everything from abolishing the death penalty to the licensing of auctioneers.

By the time the dust settled, 928 bills had been filed in the state House and Senate on Friday, setting the chambers up for a busy second half of the legislative session.

“Now, it’s game on,” longtime lobbyist Bill Miller said.

In all, some 8,000 measures are now before the 84th Legislature, including 4,114 House bills, 1,993 Senate bills and 1,771 resolutions.

[…]

The most high-profile bill filed Friday was an ethics reform package supported by Gov. Greg Abbott that long had been expected to be submitted by Sen. Van Taylor, R-Plano. Abbott had declared ethics reform a legislative emergency item during his State of the State address last month.

Taylor’s proposal, known as Senate Bill 19 and also backed by Lt. Gov. Dan Patrick, would require state officials to disclose contracts with governmental entities, prohibit lawmakers from serving as bond counsel for local and state governments and make departing legislators and statewide elected officials wait one legislative session before becoming lobbyists.

“There is no more valuable bond in democracy than the trust the people have with their government,” Taylor said in a statement. “The common-sense ethics reform outlined in Senate Bill 19 will strengthen that bond and send a clear message to the people of Texas that there is no place in government for those who betray the trust given to them by the voters.”

Tax policy also was a common theme, with [Rep. Dennis] Bonnen submitting his hotly anticipated proposal to cut business and sales taxes.

The Senate, which in some ways has been moving faster than the House, already has debated several tax proposals, and the issue is expected to be a priority focus of the session.

The Trib highlights a few bills of interest.

— House Ways and Means Chairman Dennis Bonnen, R-Angleton, filed his long-awaited proposals to cut the rates for both the margins tax paid by businesses and the broader state sales tax. The margins tax bill, House Bill 32, is identical to one filed by Senate Finance Chairwoman Jane Nelson, R-Flower Mound. The measures should draw the House more into the tax cut debate this session, which until now has been focused more on the Senate, where Nelson has already held hearings on some high-profile measures.

— Several measures filed Friday aimed at allowing Texas to change its approach to immigration, even as broader proposals stall in Washington.

House Bill 3735 by state Rep. Byron Cook, R-Corsicana, seeks to establish a partnership with the federal government to establish a guest-worker program to bring skilled and unskilled labor to Texas.

House Bill 3301 by state Rep. Eddie Rodriguez, D-Austin, would recognize undocumented Texans as “citizens” of the state. It would allow them to apply for driver’s licenses, occupational licenses and state IDs if they meet certain residency criteria and are can verify their identity.

“It also opens the door for future conversations about the very real fact that these Texans without status are here, they are not leaving, and we should be doing everything we can to help them find employment, housing and opportunity,” said Laura Stromberg Hoke, Rodriguez’s chief of staff.

— House Bill 3401 by state Rep. Matt Schaefer, R-Tyler, seeks to establish an interstate compact between interested states for the detection, apprehension and prosecution of undocumented immigrants.

— Looking to add restrictions on abortion, state Rep. Jodie Laubenberg, R-Parker, filed House Bill 3765 to beef up the state’s informed consent laws when it comes to minors. Texas law already requires patients seeking an abortion to go through the informed consent process, but Laubenberg’s bill would require notarized consent from a minor and a minor’s parent before an abortion is performed.

— House Bill 3785 from Rep. Marisa Marquez, D-El Paso, would permit patients with cancer, seizure disorders, PTSD and other conditions to medical marijuana. The measure is broader than other bills filed this session that would only allow low-level THC oils to be used on intractable seizure patients.

— The National Security Agency might have some trouble in Texas if Rep. Jonathan Stickland, R-Bedford, gets his way. House Bill 3916 would make it illegal for any public entities to provide water or electric utility services to NSA data collection centers in the state.

— State Rep. Joe Deshotel, D-Port Arthur, filed a pair of measures, House Bill 3839 and House Joint Resolution 142, which would ask voters to approve the creation of as many as nine casinos. Under Deshotel’s plan, most of the casinos would be built near the Texas coast, and a large portion of the tax revenue would go toward shoring up the troubled Texas Windstorm Insurance Association, the insurer of last resort for coastal Texans.

— In an effort to pave the way for a Medicaid expansion solution that would get the support of conservatives, state Rep. Garnet Coleman, D-Houston, filed House Bill 3845 to request a block grant from the federal government to reform the program and expand health care coverage for low-income Texans. Though GOP leaders have said they won’t expand Medicaid under the federal Affordable Care Act, they’ve asked the feds for more flexibility to administer the program. Coleman’s proposal, titled the “The Texas Way,” intends to give the state more wiggle room while still drawing some Republican support.

Here’s a Statesman story about the casino bills. There’s been a distinct lack of noise around gambling expansion this session, which is change from other recent sessions. I suspect Rep. Deshotel’s proposals will go the way of those previous ones, but at least there’s a new angle this time.

Here’s a press release from Republicans Against Marijuana Prohibition (RAMP) in favor of the medical marijuana bill from Rep. Marquez; there is a not-yet-numbered companion bill to HB3785 in the Senate, filed by Sen. Jose Menendez, as well. Two other, more limited, medical marijuana bills, the so-called “Texas Compassionate Use Act”, were filed in February. I don’t know which, if any, will have a chance of passage. I will note that RAMP has been admirably bipartisan in its praise of bills that loosen marijuana laws. Kudos to them for that.

If you’re annoyed at Jodie Laubenberg going after reproductive choice again, it might help a little to know that Rep. Jessica Farrar filed HB 3966 to require some accountability for so-called “crisis pregnancy centers’. Her press release is here.

I am particularly interested in Rep. Coleman’s “Texas Way” Medicaid expansion bill. (A companion bill, SB 1039, was filed by Sen. Jose Rodriguez.) I have long considered “block grant” to be dirty words in connection with Medicaid, so to say the least I was a little surprised to receive Rep. Coleman’s press release. I have complete faith in Rep. Coleman, so I’m sure this bill will move things in the direction he’s been pushing all along, but at this point I don’t understand the details well enough to explain what makes this bill different from earlier block grant proposals. I’ve sent an email to his office asking for more information. In the meantime, you can read Sen. Rodriguez’s press release and this Legislative Study Group coverage expansion policy paper for more.

Finally, one more bill worth highlighting:

The proposal introduced by out lesbian Rep. Celia Israel (D-Austin) would prohibit mental health providers in Texas from attempting to change the sexual orientation or gender identity of people under 18. Those who violate the law would face disciplinary action from state licensing boards.

Israel acknowledged that House Bill 3495 has little chance of passing the Republican-dominated Legislature, and it wouldn’t apply to faith-based practitioners, but she said it’s an important response to the Texas GOP’s 2014 platform plank endorsing reparative therapy.

“I don’t think that they recognize how hurtful these kinds of things can be,” Israel told the Observer. “To suggest that some young kid that happens to be gay is less than normal is very hurtful and harmful and dangerous, and I think I put myself back in those years when I was first discovering who I was. … I felt strongly about introducing a bill that was a counter to that, to say, ‘We don’t need fixing. We just need your love.’”

Virtually all of the major medical and mental health organizations have come out against reparative therapy, from the American Psychological Association to the American Medical Association and the American Counseling Association.

I agree that this bill isn’t going anywhere, but as I’ve been saying, that doesn’t mean it shouldn’t have been filed. Good on Rep. Israel for doing what’s right. Equality Texas has more.

Sports betting

There may soon come a day when you can place a bet on your favorite team without having to travel, visit offshore Internet websites, or interact with people who don’t have necks.

[NBA Commissioner Adam] Silver, in a November op-ed submission to the New York Times, said he supports federal regulation creating “a safe and legal way to wager on professional sporting events. … Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.”

[Rockets owner Les] Alexander prefers to let Silver take the lead on what he describes as “a league issue, not a team issue.” But as NBA owners and players travel to New York for All-Star Weekend, Alexander continues to believe it’s time to amend the Professional and Amateur Sports Protection Act, the 1992 law that generally prohibits states other than Nevada, Delaware, Montana and Oregon from authorizing sports betting.

“I think it’s long overdue,” Alexander said. “People are gambling now on sports teams and doing it through bookmakers, which is illegal. And they are going to do it anyway, so why not make it legal? It doesn’t hurt anybody. It’s not something that’s going to hurt people.”

[…]

According to the Nevada Gaming Control agency, bettors wagered $3.9 billion on sports in the state in 2014, with the state’s 187 sportsbooks winning $227.04 million. The American Gaming Association estimates $138.9 billion is wagered illegally on all sports annually in the United States, and it estimated recently that illegal bets placed on the Super Bowl would total $3.8 billion.

That doesn’t include millions wagered in what has become the legal and, in many cases, league-authorized industry of fantasy sports. The Fantasy Sports Trade Association estimates 41 million people spent $3.6 billion playing fantasy sports in 2014.

The fantasy sports trade group emphasizes on its website that fantasy sports are games of skill and are not gambling. Alexander, however, cited fantasy sports as an example of the move toward more liberal attitudes on sports gaming.

“There’s so much fantasy sports out there, which is a form of gambling, and that’s legal now,” he said. “It (legal gambling on games) is really not a step up. It’s a step in the same direction.”

While Silver advocates changes in federal law, the NBA joins the other major leagues in opposing unilateral moves by individual states toward legalized gambling on sports.

New Jersey Gov. Chris Christie last year signed a Sports Wagering Law that allows betting on games at New Jersey racetracks and casinos. The four major pro leagues and the NCAA filed a lawsuit in federal court, and a judge in Trenton, N.J., in November granted a temporary restraining order prohibiting tracks and casinos from taking bets on games. The state has appealed.

Accordingly, some analysts agree that even if the NFL and other leagues change their stance on gambling to match Silver’s approach, it could be as long as a decade, perhaps more, before the Texas Legislature will authorize sports gambling in Texas.

“Gaming is not a popular word here,” said Bill Miller, an Austin-based consultant and lobbyist who has worked with Alexander and the Rockets. “The prospects for gaming regulations this session are minimal. It’s not rosy at all.

“I don’t think it’s from moral outrage. I think it’s a matter of fear from new members that come from conservative (voter) bases.”

That’s true enough, but I think there’s more to it than that. If Commissioner Silver managed to get Congress to authorize any state to allow sports betting – and remember, the NFL and Major League Baseball are not on board with this – there would be two distinct groups in Texas working to get that business. One is the horse racing tracks, which have been trying to get the Lege to allow slot machines at their sites, and one is casino interests, who would push for casino gambling to be legalized. Those two groups compete against each other, so neither plan ever makes any advances. If they ever worked together towards a common goal, they might have better chances. That just hasn’t been the case, and so here we are. If I were a betting man, I’d bet the over on that “decade or more” line. I’d give marijuana legalization better odds of happening in that time frame.

On game rooms and gambling

Looks like Fort Bend County wants to follow in the footsteps of Harris County when it comes to dealing with game rooms.

Last weekend, Fort Bend County sheriff’s deputies raided the H-90 Game Room on U.S. 90A east of Richmond, hauling away 97 slot machines, interviewing and releasing about 30 customers and charging one employee with a misdemeanor.

Unlike many places that get shut down, though, the business that opened in July had not been the subject of any police calls for service.

The raid has prompted a discussion about how much of a threat game rooms actually pose to community safety.

Some Fort Bend residents had been pressing authorities to crack down on game rooms that sprouted up in the wake of Harris County’s enforcement of new rules targeting the establishments, often the scenes of shootings and other criminal activity. They didn’t want a proliferation of game rooms bringing the same problems to Fort Bend.

Sheriff Troy Nehls acknowledged that residents’ concerns prompted his department’s recent action, which involved four divisions of his office.

“We’ve received calls from the community, so we did what we could to address the issue,” the sheriff said. “This one was right off Highway 90, so it was more visible. Thus, we had more people calling concerned about the operation.”

Nehls said he takes game rooms seriously, but he played down their impact so far. He noted that he has seen no evidence of an uptick in violence, nor had there been any calls for police service at either the H-90 Game Room or another gambling parlor, on FM 359. It was open just a few months before voluntarily closing under pressure from nearby homeowners.

[…]

Other residents say authorities are wasting time cracking down on an activity they think should be legalized, even if it is only to discourage the gang activity that was often attracted to the cash-based operations in Harris County.

Larry Karson, a criminology professor at the University of Houston, said it’s the responsibility of police leaders not only to crack down on illegal activity, but to educate communities about the actual level of crime, particularly when an issue becomes a public debate.

“One generally expects any law enforcement official to recognize the concerns of the community,” Karson said. “If, based on that officer’s experience, it’s not quite as dangerous as might be assumed, he obviously needs to communicate that.”

The Texas Constitution bans most forms of gambling, but the poker-based eight-liners common to game rooms are legal to own as long as the prizes do not exceed $5 per play. Police, prosecutors and other Houston-area officials argue that most game rooms do not operate within those narrow rules, awarding larger cash sums illegally and drawing other criminal activity. To thwart enforcement of the state’s ban, officials say, many game rooms require paid memberships designed to keep out undercover officers.

Karson differentiated between the risk of crime at game rooms and at casinos, both of which attract robberies because of their cash payouts.

“You run into that security nightmare that legitimate casinos deal with by coordinating with police,” Karson said. “Any business that’s illegal doesn’t have that option. That leads to a potentially nasty cycle.”

As we know, Harris County has tightened its enforcement on game rooms thanks to some legislative help, and after surviving a lawsuit, enforcement is on in full swing. It’s not a surprise that some of this activity might cross the border into Fort Bend, or that Fort Bend might be a bit proactive about trying to stop it. I figure Fort Bend will get the legislative help it now seeks in expanding its authority against game rooms, much as Harris did in 2013, and I won’t be surprised if other counties follow suit.

What did surprise me in that story was the almost casual mention of the “other residents” who think game rooms should be legalized. I’m not sure if there are actual people making that case, or if that’s just sort of a clumsy shorthand for support for expanded gambling in Texas, as there wasn’t any further exploration of it. I wouldn’t have given it much more thought had I not also received this email from Houston Controller candidate Carroll Robinson, which discusses the very subject of game rooms and legalized gambling:

The Houston Chronicle has recently reported that “local investigations have revealed how lucrative the illegal gaming trade can be, providing operators with as much as $20,000 per day. With such establishments spread across some 700 strip centers in the county, their total proceeds could be larger than the [$1.55 billion] budget for all Harris County government.…”

Not only are illegal gaming rooms generating hundreds of millions of dollars per year in untaxed revenue, they are also magnets for crime. Wouldn’t it be better to legalize slot machines (at existing legal horse and dog racing tracks) and Casinos in Houston and allow the city to regulate them and collect extra revenues to pay for city services?

Legalizing slot machines at existing race tracks and legalizing casinos would also help eliminate illegal gaming rooms and the crime associated with them.
Even Metro would receive revenue from the increased sales tax revenue generated from legalized gaming.

The City of Houston should investigate and evaluate all its options for legalizing and regulating slot machines and casino gaming under its Home Rule Authority.

I can’t say I’ve seen many city candidates take a position on expanded gambling in Texas, as that’s a matter for the Legislature and not likely to directly intersect with Houston. Sam Houston Race Park is outside city limits, and I can’t imagine a casino being built here. I’m sure there would be some effect on the city if one or both of these things were to be legalized, but I doubt it would be much. I don’t know how much effect it would have on the game rooms, but my guess is that we’d still have them regardless. You can like the idea of expanded gambling or not – as you know, I’m very ambivalent – I just don’t think it has much to do with the game room issue.

Just a reminder that “more gambling” does not necessarily mean “more revenue”

If Atlantic City can go bust…

The winning streak has run cold for Atlantic City, N.J.

Earlier this week, the upscale Revel Casino Hotel announced it will close, bringing the total number of casinos in the city expected to close by the end of the year to four. Thousands of workers are confronting unemployment.

The state has long guaranteed Atlantic City a monopoly on gambling within New Jersey’s borders, but gambling revenues there have been declining due to increased competition from new casinos in neighboring states and the lingering effects of the financial crisis. The monthly report from the state Division of Gaming Enforcement issued Wednesday shows that the trend is continuing, as July’s take declined 7.7 percent year over year.

Pennsylvania, which only legalized casino gambling in the past decade, has replaced New Jersey as the state with the second-largest gambling industry. More casinos have been proposed in New York. Yet revenues have been disappointing across the region. In New Jersey, they have declined by around half from a high of $5.2 billion in 2006.

Most disappointing for investors has been the performance of the casinos’ new online gaming businesses. The prospect of online revenues has kept several casinos open despite declining income.

“A lot of these casinos have been unprofitable for quite some time,” said Alex Bumazhny, an analyst at Fitch Ratings.

Online gamblers haven’t anted up, though, and several casinos have folded. Bumazhny estimates that online gaming revenues for New Jersey businesses will total only around $125 million this year. Revel follows The Atlantic Club, which closed in January, and the Showboat and the Trump Plaza Hotel and Casino, also expected to close this year.

I like to note this sort of news item because as sure as the sun rises, at some point in the fall as the elections get settled and legislators start pre-filing bills, I’m going to get a press release from a pro-gambling expansion group touting the economic benefits of slot machines at horse racing tracks and/or casinos. Said press release and its accompanying economic study will point out the vast number of Texans that are currently gambling in Louisiana, New Mexico, Oklahoma, and other non-Texas states, and will lament the money that could have been spent and gambled right here. My point is that the casinos and riverboats and what have you in Louisiana and New Mexico and Oklahoma and wherever else won’t simply give up the business those traveling Texans bring them without a fight, and the competition they will bring to hold onto their existing customers as well as lure new ones may possibly have a downward effect on those numbers in those press releases and economic studies. This isn’t about whether one does support or should support expanded gambling in Texas – as you well know by now, I am deeply ambivalent about it. It’s just a reminder to keep a sense of perspective when the issue heats up as it always does every two years.

Game room lawsuit dismissed

From last week:

After a lengthy tussle over new game room regulations for Harris County, a federal judge Tuesday issued an order denying requests from a local game room owner to stop the new regulations.

“The game room situation in Harris County is a big problem,” said Fred Keys, an assistant attorney for Harris County. “This is a good result for the citizens of Harris County.”

In his suit against both county and city officials, game room owner Fabian Elizondo was attempting to stop enforcement of new game room regulations, which took effect May 30. He contended the new Harris County regulations would inhibit his right to make a living because the rules are too vague, making them difficult to follow.

U.S. District Court Judge David Hittner issued an order denying requests for relief from Elizondo, including his request for a permanent injunction against enforcing the new regulations. Hittner is expected to issue a final judgement in the next few weeks.

Attempts to reach Elizondo’s attorney were unsuccessful.

Now, Elizondo and his seven game rooms will be responsible for complying with those new regulations. The only regulation he is safe from, for now, is getting new county permits.

See here for the last update. Harris County adopted tighter rules late last year, and is doing the enforcement of the rules, with HPD working under these rules for enforcement within Houston. I’ll be interested to see what if any effect this has on the game rooms – will they comply, or will they just go further underground? Should make for an interesting case study if nothing else.

Game room enforcement back on in Harris County

Better choose your eight liner provider carefully.

After clearing a few legal hurdles, Harris County’s new game room regulations – on which the city of Houston is piggybacking – are set to take effect Friday.

Late Tuesday after a hearing, a federal judge denied a request from a game room owner and operator for a temporary restraining order that would have blocked the new rules from being implemented. The accompanying lawsuit against Harris County – the second filed since Commissioners Court approved the regulations in December – still is active, with another hearing set for next month.

Under the regulations, game rooms with six or more video poker or “eight liner” machines will be required to obtain permits, pay a $1,000 annual fee, shut down between 10 p.m. and 8 a.m., and leave windows unobstructed. The shops also will be required to identify themselves with signs reading “Game Room” and would be barred from requiring a membership for entry, a practice officials say keeps police out.

The new rules were originally set to take effect in March, but the Harris County Sheriff’s Office decided to delay implementation until May 30 to allow more time for game rooms to comply.

See here, here, here, and here for the background. According to Hair Balls, a motion for preliminary injunction is set for June 23, but enforcement is now happening. So be careful where you gamble, you never know when the heat may be on.

Game room injunction lifted

The temporary reprieve that Harris County ganerooms got from the courts has been lifted.

Houston and Harris County moved one step closer Friday in their quest to crack down on illegal game rooms after a judge threw out a restraining order which had blocked new regulations due to come into effect this month.

Game room owner Altaf Makanojiya, 31, had sought the restraining order and a permanent injunction against the new rules which his lawyers say are a “transparent attempt to outlaw game rooms.”

According to City Attorney, David Feldman, the judge flatly denied the injunction, just one week after the restraining order halting the new laws had been put in place.

Attorneys for the county confirm the ruling saying they believe the judge agreed with their claim that Makanojiya had no legal basis for his suit because his primary business is supplying poker machines, not operating game rooms.

First Assistant County Attorney Robert Soard said his team are awaiting final clarification early next week but stated that if they are correct, the suit against them will now be dismissed entirely.

Even without a full dismissal, this means the new regulations go into immediate effect in Harris County with City officials looking to adopt them all across Houston as soon as paperwork can be finalzed.

“County to approve interlocal (agreement) in short order so enforcement within City can then begin,” Feldman said via text message.

See here for the background. Harris County was given extra powers by the Legislature last year to regulate game rooms, and Houston contracted with them do enforce the new regulations rather than amend their own ordinances. It will be interesting to see how well this experiment works.

County enforcement of game room regulations halted for now

Oops.

A quest by the county and city to crack down on illegal game rooms has hit a legal roadblock after a civil court judge granted a temporary restraining order barring Harris County from enforcing strict, new regulations.

The city had been poised to piggyback on the county’s rules under a new state law. Instead, its lawyers will join forces with the County Attorney’s Office to defend them.

At the request of a game room owner, state District Court Judge Elaine Palmer granted the restraining order late Friday, the day before the county’s regulations were set to take effect. A hearing has been set for March 14.

Lawyers for Altaf Makanojiya, 31, a game room owner and supplier of video poker machines known as “eight-liners,” sought the temporary restraining order and a permanent injunction against regulations Harris County Commissioners Court adopted in December for establishments housing six or more video poker machines.

[…]

Eight-liners are legal in Texas, but game room operations that award more than a few dollars in prizes are not. Officials for years have condemned the establishments as hotbeds for illegal gambling, armed robberies and other criminal activity.

Under the regulations in question, game rooms operators must obtain permits, pay a $1,000 annual fee, shut down between 10 p.m. and 8 a.m. and are banned from requiring a membership for entry, a practice officials say keeps police officers out. New game rooms must be located at least 1,500 feet from schools, churches and residential neighborhoods.

See here for the background, and here for a recent Chron story about the city/county enforcement agreement. Houston adopted an ordinance regulating game rooms six years ago, which among other things had the effect of causing some game room operators to relocate outside city limits. That made Harris County lobby the Legislature to pass a law giving it enforcement capabilities, which it got last year. The county’s new regs allowed for cities to opt in and team up with them on enforcement, which is what Houston did. Now we wait for the judge to sort it out before that goes into effect. I personally see nothing nefarious about the new regulations, but you never know what will happen with a lawsuit like this.