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Andy Abboud

Why the push for casinos failed

Here’s a long story with a detailed answer to what is honestly a straightforward and easy to understand question.

Photo by Joel Kramer via Flickr creative commons

In its effort to bring casinos to Texas, Las Vegas Sands — the gaming empire started by the late Republican megadonor Sheldon Adelson — hired an army of lobbyists and spent millions more on TV ads, all after an election season in which Adelson’s largesse was key in helping the state’s Republicans remain in power.

But the gargantuan undertaking ultimately did not make it far at the Capitol, with Sands’ legislation failing to make it to the floor of either chamber and not even receiving a committee hearing in the Senate.

The legislation — which required voter approval — would have brought a monumental expansion of gambling to Texas, which has some of the most restrictive gaming laws in the country. The centerpiece of the Las Vegas Sands proposal was to build “destination resorts” with casino gambling in the state’s four biggest metropolitan areas.

The company had insisted it was committed to Texas for the long term. But people involved in the effort point to at least a few factors that stood in the way of more progress in their debut session.

There was the difficulty breaking through in a session dominated by the coronavirus pandemic, the winter weather crisis and Republican leaders’ contentious priorities, which are now leading to at least one special session. There was Lt. Gov. Dan Patrick’s perceived opposition to expanding gambling that made Senate progress a tall order. And there was the relatively late filing of the Sands-supported legislation, giving lawmakers less time than usual to digest what would be a hugely consequential change to the Texas economy.

While Sands took pains to clarify that casinos would not be a fiscal cure-all for Texas, some supporters of the proposal said they were nonetheless hampered when the state’s budget projections turned out better than expected, decreasing curiosity in new revenue streams.

“Something this big and complex takes time, and we’re only up here five months of every two years,” said Rep. John Kuempel, R-Seguin, who carried the Sands-backed bill in the House. “These things take time.”

Las Vegas Sands ended up spending as much as $6.3 million on lobbying at the Capitol, according to state records, plus what the company pegged as at least $2 million on a statewide ad campaign. It is likely that the company’s total spending topped $10 million, given the number of weeks that the company stayed on the air in the state’s most expensive media markets.

It was easily the biggest campaign to expand gambling in Texas that the state has seen in a long time.

As session wound down and it became clear that Sands’ House bill would not advance, Sands issued a statement in which it claimed it made “great strides” this session and promised to “continue to build community support across the state to ultimately turn this vision into a reality.” Sure enough, the company continued airing TV ads promoting its plan in the weeks after the proposal’s fate had crystallized.

One Republican lawmaker who sits on the House committee where the bill died had a less optimistic outlook.

“It fell really flat,” Rep. Matt Shaheen of Plano said of Sands’ overall push this past session. “It just didn’t go anywhere. It was a bad investment on Sands’ behalf, and I think any future investments will continue to be a bad investment.”

Emphasis mine. All of the reasons cited here are valid, and we knew about them in January when this effort began in earnest, but the one I’ve highlighted is the real reason. As long as Dan Patrick rules the Senate, nothing will happen that he personally does not approve of. As with marijuana reform and all of the long analyses of its continued failure, I don’t quite get the reluctance to be clear about that.

To be sure, efforts to expand gambling have been pursued, and have abjectly failed, for a long time now, well before Dan Patrick was on the scene. Earlier efforts had their own reasons for failure, and it should be noted – it should always be noted – that the goal has always been a constitutional amendment, which would require the approval of voters to go into effect. It also requires a two-thirds majority in each chamber, which is a big lift and which suffers from the problem that religious conservatives, mostly Baptist groups, strongly oppose expanded gambling in Texas. That much has not changed, and it too is an obstacle that will endure. All of Sheldon Adelson’s money and army of lobbyists can only do so much about that.

This is where I say again that I am ambivalent about expanded gambling, and if it ever does come to a vote I’ll have to think about it, and my decision will be based on the merits of the specific proposal. Let’s just say that I’m not at all unhappy that a law that would have put a lot of money into the estate of a terrible person like Sheldon Adelson did not make it through.

Finally, the story notes that a parallel push for sports betting, which worked in tandem with the casino effort and also had various professional teams on its roster, also failed. Dan Patrick opposed that as well, so everything I’ve said already applies.

Once again, bills to allow more gambling in Texas are dead

Same as it ever was.

Photo by Joel Kramer via Flickr creative commons

A high-profile push by the gaming empire Las Vegas Sands to bring casinos to Texas appears doomed at the state Capitol as this year’s legislative session begins to wind down.

Monday was the deadline for House committees to advance that chamber’s bills and joint resolutions, and the deadline passed without the State Affairs Committee voting out the Las Vegas Sands-backed House Joint Resolution 133. The legislation, which got a hearing last month, would let Texas voters decide whether to build “destination resorts” with casinos in the state’s four biggest metropolitan areas.

Identical legislation in the Senate has not even received a committee hearing, though its chances there were always slimmer given the resistance of the presiding officer, Lt. Gov. Dan Patrick.

“We have said from the beginning that we’re committed to Texas for the long haul,” Andy Abboud, Las Vegas Sands’ senior vice president of government relations, said in a statement given to The Texas Tribune on Monday evening. “We have made great strides this session and have enjoyed meeting with lawmakers about our vision for destination resorts and answering all the questions they have.”

Abboud added that the feedback has been “overwhelmingly positive,” promising the company “will continue to build on this progress over the final days of the legislation session, and over the coming months, we will continue to build community support across the state to ultimately turn this vision into a reality.”

See here and here for the background. Similar bills to allow betting on sports, which is now a thing that can happen, are also dead. (Yes, yes, I know, nothing is All Dead in the Legislature until sine die, but trust me – there’s no Miracle Max chocolate-coated pill for these bills.)

I’ve been following legislative sessions for almost 20 years now, and I’m pretty sure that in every one, we’ve had an organized and often highly publicized push for some form of gambling legalization. Horse racing, slot machines, poker, casinos, and now sports betting, every session without fail. Sometimes economic misfortune has been cited as a reason why This Time It’s Different, sometimes some other economic reason is given. Lamentations about people going to Louisiana or Oklahoma to get their gamble on are always a part of the ritual, as is the dredging up of a poll showing popular support for whatever form of gambling is being touted. We used to have a Republican Speaker whose family money came from horse racing. This time, we had an investment from Sheldon Adelson, gambling mogul and Republican super-duper-donor. Each was supposed to be a way to crack open the door. And without fail, every session it all ends with an unceremonious thud.

I am as you know ambivalent about expanded gambling. I don’t have any philosophical opposition to it, but I also don’t believe it to be all that good for the state, as it comes with a truckload of externalities. I do think that much like expanded access to marijuana, it’s coming to Texas sooner or later, if only because enough people want them. In both cases, the simple reason why these measures (the pro-pot ones are also highly touted and written about in breathless fashion) don’t get anywhere is that Dan Patrick opposes them. For reasons unclear to me, that usually merits little more than a one-paragraph acknowledgement towards the end of the stories. Dan Patrick won’t be in charge forever – if we’re lucky, this will be his last regular session to lord over – and that’s one reason why I expect things to eventually change. Until then, the smart money will always be to completely disregard the puff pieces about the hot new gambling advocacy alliance and bet on nothing happening. If there’d been a line on that and I’d been smart enough to play it I could put both my kids through college on that by now.

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.