Texas Legislature Begins Work on Sports-Betting Bills

If mobile sportsbooks were legalized in Texas, it would become one of the biggest markets in the U.S. for operators.

Last Updated: Mar 22, 2023 3:04 PM ET Read Time: 3 min
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Legislation that aims to bring legal sports betting to Texas finally got its day in committee, as lawmakers in Austin began probing the pros and cons of authorizing bookmakers to do business in the Lone Star State. 

The Texas House of Representatives' state affairs committee held a hearing on Wednesday that allowed supporters of retail and online sports betting sites to make their case for bringing event wagering to one of the biggest untapped markets in the United States. 

Their main argument for the mobile component is that Texas sports betting is happening already — it’s just happening with illegal or offshore sportsbooks that offer no tax revenue to the state or the kind of consumer protections the state could provide. 

“If it's not clear to you yet, I think it will be clear after you hear testimony on this bill today that… wagering on sports is here, and it's here to stay,” said Rep. Jeff Leach, the sponsor of House Bill 1942, which would authorize online sports betting in the state. 

A big deal

If mobile sportsbooks were legalized in Texas, it would become one of the biggest markets in the U.S. for operators. The state has approximately 10 million more people living there than New York, the biggest sports-betting market in the U.S. after it launched mobile wagering in January 2022.

Texas, however, has several obstacles to getting a sports-betting bill passed, including a relatively large population of social conservatives and regular legislative sessions that occur only in odd-numbered years. The state's constitution would also need an amendment to allow sports betting, which requires two-thirds of the legislature to approve the proposed change and a majority of voters to do the same.

H.B. 1942 and its Senate equivalent were introduced in February. Still, they have the influential backing of the Texas Sports Betting Alliance, a coalition of professional sports franchises, leagues, racetracks, and sportsbook operators. The group includes the likes of the Dallas Cowboys, DraftKings, and the Texas Motor Speedway, among others.

The legislation would enable professional sports organizations and racetracks in the state to apply for a mobile sports betting license and partner with an operator such as FanDuel to offer wagering on their behalf. Mobile betting operators would be subject to a 10% tax on their adjusted revenue, which would not include any wagers made using free bets or other promotions. Bettors would have to be 21 and older to wager.

The state affairs committee left H.B. 1942 pending, meaning no action was taken. The same was done with House Joint Resolution 102, which would propose a constitutional amendment to allow sports betting.

When, or if, further action will be taken remains to be seen. There is no guarantee any sports-betting bill passes during this legislative session, which is scheduled to run until the end of May.

The state affairs committee also heard testimony on House Joint Resolution 155, which proposes a constitutional amendment to permit casino gaming at "destination resorts," as well as authorize retail sports betting.

Rep. Charlie Geren, one of the resolution’s sponsors, was asked if his legislation was incompatible with the online sportsbook-related measures. While Geren was unsure if both resolutions could be adopted, he added that his measure could allow mobile sports betting in the state.

“As it is currently written, [H.J.R. 155] would allow only sports wagering on site,” Geren said. “But the legislature could authorize the mobile sports betting if the legislature chose to do that.” 

The casino resolution was also left pending by the committee.

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