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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.

It’s not easy going green

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

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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.

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.

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.

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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.

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.

Pot polling

Our favorite pollsters aren’t optimistic about pot legalization despite some good looking poll numbers for it.

In the February 2014 University of Texas/Texas Tribune Poll, we asked respondents for their opinions on marijuana possession and gave them four options to choose from:

  • “marijuana possession should not be legal under any circumstances;”
  • “marijuana possession should be legal for medicinal purposes only;”
  • “possession of small amounts of marijuana for any purpose should be legal;” and,
  • “possession of any amount of marijuana for any purpose should be legal.”

Overall, just under a majority of Texans, 49 percent, said that possession of either a small amount or any amount of marijuana should be legal for any purpose. When combined with those who think marijuana should be made legal for medicinal purposes, 28 percent, it’s clear that the vast majority of Texans think that marijuana should be legal in some form. These results are comparable to national numbers, which show a slim majority of Americans favoring legalization.

But the overall results cloud the distinct ideological and partisan divergence over marijuana. Overall, 23 percent of Texas voters think that marijuana should be illegal in all circumstances, but opposition grows to 32 percent when we focus on Republican voters. Conversely, 77 percent of liberals think that small or large amounts of marijuana should be made legal for any purpose, but among conservatives, that support drops to 35 percent. Add the 32 percent of conservatives who would only legalize marijuana for medicinal purposes, and you see that the majority of the voters who drive elections in Texas remain clear-eyed in their opposition to recreational pot use.

This configuration of public opinion illustrates one reason (among the many possibilities) for some Democratic elites’ harsh attitudes toward Kinky Friedman’s candidacy for agriculture commissioner. However much potential there may be for the Democratic — and especially the liberal — grassroots to respond enthusiastically to Friedman’s emphasis on marijuana decriminalizationmoderates and independents are evenly divided between those who are relatively restrictive (favoring, at most, legalization of medical uses) and those who are permissive (supporting legalization of some amounts for any use).

In the midst of a campaign in which Democrats need to persuade at least some non-Democratic voters in addition to mobilizing their own homegrown base, the talk about marijuana is at best a mixed bag, offering Republicans the opportunity to tar Democrats as cultural liberals among the far more numerous conservative and moderate voters.

This divergence of opinion between the different ideological poles is not as strong as we’ve seen in many other policy areas (abortion, for example), but there is a real distinction. This polarization in attitudes — along with the general trajectory of public opinion and the revenue that states like Colorado are pulling in — means there is reason to believe that this issue will be around for a while: There are political and policy reasons for even conservative leaders to consider some form of legalization, but also ideological points to be scored in public opposition.

Like other policy areas that have a potential moral component, such as gay marriage, opposition to decriminalization may turn out to be significant, particularly because it is concentrated in the very constituencies that buttress Republican dominance of elections and the legislative process in Texas.

I would look at it this way. There was widespread public support for changing Texas’ laws about beer distribution to allow microbreweries and brewpubs to sell their wares directly to the public and in retail outlets, but it took several legislative sessions for a bill to finally pass, and even then it was nearly derailed. What it took was mostly a matter of organization and lobbying, with some scaling back of the original legislation to earn enough support from former opponents. Though the opposition was limited to one lobbying group for the beer distributors that had no real argument for maintaining the status quo, they had money and power and it took a large show of force to overcome them.

In the case of pot legalization, we have decent public support but a fiercely determined opposition that likely won’t go away when they find themselves badly outnumbered, and as yet there’s no organization pushing legalization, just one renegade candidate that still has to win a runoff and a general election, and isn’t particularly well-liked in his party. There’s a decent chance that advances will be made to further decriminalize pot, as treatment and alternative forms of sentencing are much more popular these days than jail time, and there’s a conservative push for de-incarceration as a matter of fiscal policy. That’s not the same as legalization, of course, but it’s a large and solid piece of middle ground with a less determined opposing faction. When there’s a commercial interest in favor of pot legalization, that’s when we’re likely to see some real action, assuming such an interest is shown by the Colorado and Washington experiences to be viable. But as with casinos, that’s no guarantee, either. My advice to those interested in advancing this cause is to work on decriminalization. It gets you most of the way there, it’s achievable, it will keep people out of jail, and it will make it easier down the road to take the next step when and if public opinion becomes more firmly in favor. Advocating for medical marijuana is also probably a decent bet. But in the absence of even a rudimentary grassroots movement for legal pot, I wouldn’t expect anything more than that to be possible.

We’ll always have Kinky

Like cicadas on a four-year cycle, he keeps coming back.

Bi-polar and tri-partisan

Kinky Friedman doesn’t know if he’s ready to jump back into Texas politics.

But the cigar-chewing humorist and musician — known for the black attire and cowboy hats he normally dons — said he may soon create an exploratory committee to help him decide whether to run for office again.

And if so, for which one.

“Maybe I should do what Rick Perry does and pray for an answer on what to do,” Friedman, 68, said with a chuckle Tuesday during a telephone interview with the Star-Telegram.

Some political observers say they wouldn’t be surprised to see Friedman throw his hat into the ring for nearly any statewide office.

“A comedian needs an audience,” said Harvey Kronberg, editor and publisher of the Austin-based Quorum Report, an online political newsletter.

Friedman said he probably will run for office as a Democrat, as he did during his unsuccessful 2010 bid for Texas agriculture commissioner, rather than as an independent, as he did in his failed 2006 gubernatorial bid.

“I’m keeping my options open,” said Friedman, a self-proclaimed Jewish Cowboy who lives in the Hill Country.

Yes, well, what else is new? If you need a reminder why Friedman is rather less than beloved among Democrats, read this blast from the recent past. Of course, he went from that to being a Wendy Davis for Governor cheerleader, which I suppose at least shows he’s capable of learning. I’m tired of bashing Friedman all the time, so let me make him a deal. If he promises to run for Railroad Commissioner, or Land Commissioner if John Cook decides against it, I’ll shut up about him through next November, assuming he doesn’t say anything too stupid. Hell, he can run for Attorney General if he wants to, on the premise that even a non-lawyer jokester like him would do a better and less detrimental job than a blinkered partisan hack like Greg Abbott, and I’ll be okay with that. Just stay the hell out of the Governor’s race, and don’t go up against a better Dem in anything else, that’s all I ask.

On Tuesday, he outlined his top two political priorities if elected to office: Legalize marijuana use and casino gambling in this state.

“Texas is going to do all this in the next ten to 15 years,” he said. “But by then, he will be the caboose on the train.”

Making his top two priorities reality, Friedman said, will provide a key boost for Texas’ economy.

Legalizing casinos in Texas would “stop the bleeding from all the billions of dollars that are walking out of the state for gambling,” he said.

And making marijuana use legal in Texas, he said, “would put a real crimp in the Mexican drug cartels — and make Willie Nelson very happy.”

I admit, Railroad Commissioners don’t have much to do with either of these things. He’d have to learn some actual policy stuff to be RR Commish, not that that was a prerequisite for the likes of David Porter or Elizabeth Ames Jones. But he could possibly get elected to the Railroad Commission, and that would give him a real platform to advocate for these things. Best I can do, sorry.

On a side note, since I mentioned the office of Attorney General, I’ll note that State Rep. Dan Branch announced his intention to run, a move that was almost as widely expected as Greg Abbott running for Governor. In doing so, Rep. Branch did his best Abbott impersonation, promising to protect the right of unborn babies to carry assault weapons so they can defend themselves from a rapacious federal government, or something like that. I might be a bit fuzzy on the details. I’m not sure if it’s more a pity or just pathetic that a generally low-key legislator who’s built a fairly solid reputation as a policy wonk has to spout such pablum – I suspect he didn’t sound much more genuine in saying it than I would have – but these are the times we live in. And as a result, and because Branch’s main competition is people like the more ludicrous and less substantive Barry Smitherman, you can see why Kinky for AG isn’t such a crazy idea after all. It’s not that hard to sound sensible opposite the likes of that. Kinky is downright statesmanlike in comparison.

A cautionary tale about expanded gambling

Wonkblog:

Earlier this week, Delaware’s casinos got a surprise windfall. Just days after saying no to tax breaks, Gov. Jack Markell (D) proposed that $8 million of the state’s budget surplus be distributed amongst its three struggling establishments, to forestall the layoffs that at least one of them had threatened.

That would seem to defeat the purpose of casinos: Generating revenue for states. The problem is, for the past decade, almost every state in the nation has tried to cash in–and gamblers aren’t keeping up. Twenty-three states have now legalized commercial casinos, and revenues are back to 2007 levels after taking a dip during the recession. Twenty-eight states have Native American-owned casinos, where revenues have been essentially flat since 2007. Almost all new gambling facilities take revenue away from somebody else, and one state’s explosive growth is another’s stagnation.

Delaware is a prime example. Neighboring Pennsylvania went from none in 2006 to 11 casinos making more than $3 billion in 2012, while Maryland opened two casinos over the past two years and more than doubled its revenues. And it’s not the only nearby state in trouble. Even before Hurricane Sandy barreled into Atlantic City, its gambling industry was in a long decline, and even a state-of-the-art new facility looks headed toward bankruptcy.

“Pennsylvania and Maryland had provided a substantial amount of the business for the casinos around there, and when they get their own casinos, all things being equal, people will gamble closer to home,” says Joseph Weinert, an analyst with Spectrum Gaming. “The whole purpose of those states legalizing casinos to begin with is to keep their residents’ tax dollars in state. Delaware’s in a pickle, there’s no two ways about it.”

It’s the same sad song in the Midwest, where casinos have raced to open in Ohio; Connecticut, where customers have been vacuumed up by new facilities in New York, and Missouri, hit by Kansas’ three new casinos since legalizing gambling in 2007.

[…]

At the end of the day, geography is destiny: The winners in this new world of ubiquitous gambling will be those with casinos close to large population centers (hence the hot competition to build a new facility in National Harbor, across the river from Washington D.C.). Gaming industry advocates like to point to Las Vegas, saying it’s possible to create a destination that people will travel to with rock-bottom tax rates and massive development. But Delaware isn’t going to create an east coast Vegas. And it’s probably a better idea, as the News Journal advised, to pick up and move on.

One can certainly argue that Delaware’s situation is not at all like Texas’ would be. It’s a short drive from Maryland and Pennsylvania to Delaware, so when those states allowed gambling and casinos sprung up, it was likely just too much competition in a limited geographic area for them. That won’t be a problem in Texas, since even though we’re surrounded by gambling states, it’s too far for many people to drive. Still, I’d be concerned that the market for gambling – casinos, slot machines at racetracks, whatever – is inherently limited, perhaps more so than we think. In addition, the existing casinos aren’t going to give up their Texas customers without a fight. I remain largely ambivalent on the question of whether or not to expand gambling in Texas, but I also remain skeptical of the claims that they will bring a bonanza to us. As with the Lottery, we should be very wary about getting dependent on any revenue from this kind of source.

Astrodome-palooza

In case you aren’t completely full of my opining on the Astrodome and its possible fate, I was the author of a op-ed in the Sunday Chron on the subject. It’s kind of the Reader’s Digest version of the things I’ve been saying here, so if you don’t click over you won’t miss anything new to you. I did put a copy of it beneath the fold, since I like to keep track of my own writing.

Elsewhere on those same op-ed pages, former County Judge and State Sen. Jon Lindsay offers his critique of the private proposals that have been floated.

Still cheaper to renovate than the real thing

Now we have an opportunity to develop the premier convention city in the world. Just look at what we could create. The combination of the Metro rail service connecting the George R. Brown Convention Center and Discovery Green downtown to the Reliant and Dome complex would be awesome for really big events like a Super Bowl. There are other events that would benefit, like the Offshore Technology Conference (OTC) that requires event facilities combined with entertainment areas. I’m sure the Convention and Visitors Bureau can name others.

[…]

I am critical of the proposal to strip the building to its structural steel and leaving it exposed. Where is the logic in having a steel skeleton out there that would require a full-time painting crew working to stop the rust? That tension ring must be protected or we will have a nature-caused implosion. A very large sculpture is not the answer, either.

There are not many stadiums that have better parking than we already have at Reliant. It can and should be improved, however. A parking garage would pay its own way, and if not, some of the event sponsors should contribute. There should be more effort to encourage parking downtown and use public transportation to get to the games and some other events like the rodeo. It’s much easier to get out of downtown after a game than the Reliant parking lot.

The proposal to develop exhibition space might make some sense if done on a grand scale. By that, I mean get some of the big players involved, like our major oil companies. Develop a big oil field in the Dome featuring some of the early oil rigs and everything big in the industry. Why can’t we have a continuing OTC featuring some of the past? Along with that, put in some educational facilities and meeting rooms. The industry could see that as a way to encourage youth to want a career in oil and gas.

He also mentions that if Texas ever does legalize more gambling, the Dome would be a “premier location” for it. The Dome as casino is the granddaddy of all What To Do With The Dome proposals, though as you can see Lindsay’s successor as County Judge didn’t think much of the idea back then.

Finally, Chron sports columnist Randy Harvey calls on Commissioners Court to think futuristically.

I’m open to most ideas, except for demolishing the Astrodome and replacing it with another parking lot. Even at the bargain price of $29 million estimated by the Texans and Houston Livestock Show and Rodeo, which is half as much as some say that would cost.

There is no doubt the building could be redeveloped as a shopping mall, a theme park, an apartment complex or a movie studio. I’m not so sure about an indoor ski resort.

It would be better if whatever it becomes commemorated the Astrodome.

Ryan Slattery, a University of Houston graduate student, wrote in his masters thesis that the steel frame and dome should remain, covering a park. The New York Times suggested it could become Houston’s Eiffel Tower.

That’s a difficult image to resist.

But I also would ask commissioners court to consider something more futuristic, as futuristic as the Astrodome was in 1965, as futuristic as NASA was by putting a man on the moon in 1969 and as futuristic as Houston still should want to be seen by the world.

Maybe we could create a museum, not of the past but of the future, more like an exploratorium, with interactive exhibits speculating on life on Earth or other planets in decades and centuries to come.

Ideas are the easy part. It’s the execution that’s tricky. If it were easy to do one of these things, we’d have done it by now.

(more…)

That’ll just about do it for gambling this session

Sen. Carona calls the chances “slim”, but it sounds like slim just left town to me.

[Sen. John] Carona, chairman of the Senate’s Business and Commerce Committee, said last week he expected to vote his sweeping gambling bill out of his committee Tuesday. But the morning committee hearing came and went, and Carona declined to bring the bill up for a vote.

Carona’s fellow senators told him they didn’t want to take a vote on the controversial topic if it doesn’t have much of a chance, especially in the Texas House, Carona said.

State Rep. John Kuempel, R-Seguin, agreed that there is not much of an appetite for gambling in the House this year.

“I don’t think it has a great chance over here,” said Kuempel, who supports expanded gambling to bring additional revenue to Texas. “It’s challenged in the 83rd legislative session in the Texas House.”

[…]

Even if his legislation fails this session, Carona said a lot has been accomplished in the past several weeks. Notably, two often clashing pro-gambling interests — those seeking slot machines at racetracks and those advocating casinos — have worked well together on a broad gambling bill.

“Time is always your enemy in a legislative session,” Carona said, adding that he is not ready to pronounce gambling dead just yet.

Sure sounds dead to me, but as always, you never know. There will almost certainly be a special session to deal with school finance next year, however, and barring anything unexpected from the Supreme Court the Lege will need to find more revenue for the schools, so expect the subject to be on the front burner. Having the cover of a court order sufficed to get the business margins tax created, and it could well do the same for some kind of gambling measure. If nothing else, we’re going to have to pay for Rick Perry’s irresponsible tax cuts somehow. So don’t bury expanded gambling too deeply just yet.

More on the potential Coushatta casino

The Houston Press cover story from last week is about the Alabama-Coushatta tribe’s efforts to get a casino again. It covers a lot of the same ground as that Chron story I blogged about on Sunday, but it also reminds us of a very sordid aspect of the original casino and why it was closed.

A federal court had ruled that the Alabama-Coushatta had violated the terms of their recognition, which, as argued by then-Texas Attorney General John Cornyn, stated that all gaming prohibited by the state of Texas was “hereby prohibited on the reservation and on lands of the tribe.” The challenge came with the full-throated ­support of Texas’s evangelical population, spurred on by a now-­notorious lobbyist named Jack Abramoff. (Ironically, the Alabama-Coushatta remain a heavily Christian community and even forbade alcohol at their former entertainment center.)

“We already knew that when we opened, we were going to be in litigation,” Williams continues. “We were prepared for that.” The ­Louisiana-­Coushatta, a related tribe just one state over, had been concerned about consumers opting for their Texas cousins and ended up enlisting the aid of Abramoff, the fedora-topped lobbyist later sentenced to nearly six years for conspiracy and tax evasion in 2006.

While secretly disparaging the Native Americans as “stupid mofos,” “monkeys” and “fucking troglodytes,” Abramoff used Christian connections in Texas to mobilize anti-casino forces. Through shell corporations and blatant corruption — Abramoff and his partner are believed to have received a total of $85 million from their Indian clients — the lobbyist managed to muster enough opposition to shutter the casinos of both the Alabama-Coushatta and El Paso’s Tigua tribe in 2002. Less than a year in, the Alabama-Coushatta’s best modern opportunity for self-sustenance collapsed.

With equal parts gall and venality, Abramoff then approached the Alabama-Coushatta with an offer to restore their casino but was found out before he could swindle more Native-American money.

“It was devastating,” Williams says, his voice moving slowly through the subsequent drop-off. “Everyone could see what was possible — at the time, when we were open, we were one of the highest-paying employers here in the surrounding area.”

A visitor asks Williams about Abramoff, but the chairman claims the name provokes no reaction on the reservation. Nobody brings him up. No one thinks about him. But it’s Abramoff’s work — his choice to blinker both Texas legislators and tribes — that ended the only casino the Alabama-Coushatta have ever known. It was Abramoff’s slimeball politics that forced the Alabama-Coushatta to revert once more to smoke shops and land cultivation as their sole, and depreciating, sources of income. It was Abramoff’s grease-stained fingerprints, his choice to skim the profits and to try to lobby both for and against the tribe’s casino, that directed Williams and his people back onto Washington’s dole.

That was more than a decade ago. In the interim, the tribe, which sued Abramoff and settled out of court in 2007, has sunk nearly $3 million into attempting to change the federal language prohibiting its casino.

See here, here, and here for more on that story. One person that was prominently involved in screwing the Alabama-Coushatte tribe but who wasn’t mentioned in the Press piece is longtime religious right mouthpiece Ralph Reed. Reed has maintained a fairly low profile in recent years, but lowlifes like him never truly go away. It’s important to remember just how awful a person he and his cronies are and were. Be that as it may, between the Congressional action and the better-than-I’d-have-thought prospects in the Lege, this could finally be the year the Alabama-Coushatta get the opportunity that had been denied them. I remain ambivalent about gambling, but I do wish them the best of luck.

Senate to consider expanded gambling

I didn’t really take it seriously when I heard that Sen. John Carona had filed his own gambling expansion legislation, but it seems it’s got some traction.

Sen. John Carona

A proposal from Dallas Republican Sen. John Carona would establish a commission that licenses 21 casinos throughout the state, including three mega-resorts in Bexar, Dallas and Tarrant counties and two smaller locations at Retama Park in San Antonio and Sam Houston Race Park in Houston.

Carona, chairman of the Senate Business and Commerce committee, told reporters Monday the proposal would keep the estimated $3 billion Texans are spending at casinos in bordering states inside state coffers while creating more than 75,000 jobs. The committee, which will consider the measure Wednesday, is likely to pass the proposal on to the full Senate, he said.

“No one can really determine yet what chance of ultimate passage it has this session,” Carona said in an interview in his Capitol office, noting his vote tally indicates both chambers are a few votes shy of approval. “It is a difficult bill because of the presumed political consequences of it, but the polls show there is overwhelming public support.”

House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, who has supported similar measures in the past, said the chances of gambling passing the Legislature this session are “slim-to-none.”

However, Pitts said the final decision on the state’s school finance trial could provide a boost for gambling in Texas. If the current ruling – that the state’s public education funding is inadequate and unconstitutional – stands, lawmakers will be searching for a new source of revenue that does not create a new tax, he said.

[…]

Under Carona’s proposal, three casinos would be licensed in coastal counties, 12 would be reserved for racetracks and three would be designated for federally recognized Native American tribes.

The majority of revenue generated – 85 percent – would be dedicated to the Property Tax Relief Fund, which supports local programs, such as public education and emergency services. Remaining revenue would belong to city and county governments and fund programs to counter gambling problems. The constitutional amendment must gain two-thirds support of the House and Senate before moving on to voters in a statewide referendum.

Sen. Carona’s measure is SJR 64. If you’ll pardon the expression, the smart money is on nothing happening, as has always been the case before. The Trib goes into some more detail.

[Carona has] been working on casino legislation for the last few sessions, but his plan this year is much more comprehensive. In the past, gaming bills have either had the support of casinos or race tracks. But not both.

That split support had doomed the efforts. This time, Carona said, both groups are on board.

“Let me make clear that this legislation has very broad support,” he said. “While not all stakeholder concerns are resolved in this bill, we have come a long way. And it is my hope that we’ll continue to work together to bring forward a bill that is best for Texas.”

The senator said his legislation is still fluid — many changes could be made. So for now, there’s no price tag on how much money casino gambling would generate. But billions are expected from the three giant destination resort casinos and 18 other facilities that would be authorized under his resolution.

[…]

But hey, if you want to pass something in the Legislature, you need to do one of two things: Show what problem the legislation would fix or, as casino supporters did this week, show an enemy that would be defeated by this bill. And according to casino supporters, we have met the enemy — and it is Oklahoma.

“In particular, we’re hemorrhaging money to Oklahoma,” said John Montford of Let Texans Decide. “Not only do they recruit our best high school football players. They also snooker us each day by building their gaming empire on the backs of Texans.”

Texas Association of Business President Bill Hammond was even less diplomatic when explaining what he sees as the benefits of casinos in Texas.

“Texans will no longer have to travel to third-world countries in order to game,” Hammond joked. “It’s unfair and unconscionable that we are making these people travel to these third-world counties that surround Texas.”

The state’s hatred of Oklahoma aside, there are still several roadblocks to casinos in Texas. Carona’s resolution needs a two-thirds vote in the House and Senate before it heads to the ballot as a constitutional amendment this November.

And on the Senate side, Jane Nelson, R-Flower Mound, has a history of threatening a filibuster over gaming legislation. As debates have neared in the past, she has even put tennis shoes on her desk on the Senate floor to let people know she’s ready to go if needed.

And, of course, if a resolution passes the House and Senate, then there’s the final statewide vote — a vote that will certainly include groups opposing casinos on moral grounds along with some backed by those neighboring states’ casinos that don’t want to lose business.

The 100-vote threshhold in the House is pretty daunting. Speaker Joe Straus will not be an ally, since he stays away from gambling bills to avoid talk about conflicts of interest, and there’s likely to be enough social conservative opposition to make it at best a close call. Still, even getting a bill out of committee in the Senate is farther than the gambling expansion forces have gone in the past. If Carona’s bill can actually make it to the floor in both chambers, who knows? Stranger things have happened.

The federal option for gambling expansion in Texas

There is a way to expand gambling in Texas without going through the Legislature.

For decades the Alabama-Coushatta Tribe fought hard to make the federal government acknowledge that it illegally developed more than 5 million acres of the tribe’s aboriginal land.

The East Texas tribe eventually won when a court said Congress owed the tribe $270 million in compensation.

But now in an extraordinary move, the tribe’s leaders say they will forgo the gigantic sum of money and forget the past if allowed to open a casino to secure their future.

U.S. Rep. Steve Stockman, R-Friendswood, and Rep. Gene Green, D-Houston, introduced legislation this month to amend the tribe’s federal recognition to include the gaming rights allowed hundreds of other Native American governments, but under one important condition: Alabama-Coushatta drops claim to the $270 million in damages a federal court recommended U.S. Congress pay in 2002 and another land-based lawsuit filed last year.

“Nobody pounded us and said, ‘This is what you’re going to do,’ ” said Andy Taylor, an attorney for the tribe. “The tribe is saying, ‘We’re this serious.’ We are willing to forget 200 years of mistreatment. All we want is economic independence.”

At times pausing to fight back tears, members of the Alabama-Coushatta Tribal Council said securing an economic mechanism to move the tribe away from dependency on quick-to-change and slow-to-grow federal appropriations cinched the difficult decision to draft what they see as a generous compromise, catch-all bill.

“With the sequestration and the situation of the federal government, we understand they don’t have $270.6 million to give to an individual tribe,” said Kyle Williams, tribal council chairman. “If we have to go after each individual issue, it would never happen and we would still be pursuing these issues 20 years from now.”

The tribe opened a casino in 2001, but a court order shut it down the next year. This bill could remove the obstacle that led to the closing of that casino. The tribe would still be limited as to what kind of games they could offer, pending action from the Legislature, but they would be able to have a casino, which would undoubtedly help them make a lot of money. The one thing that I’m curious about that wasn’t addressed in the story was what the other gambling interests in Texas think about this. I suppose if the bill in question begins to gain traction, we’ll find out.

Gambling interests narrow their focus

This is usually how it goes.

Let Texans Decide, a pro-gambling organization that is fronted by former state Sen. John Montford, was aligned at the beginning of the 2013 legislative session with big casino interests in a call for full-scale casino gambling in Texas, whether at horse and dog tracks or at yet-to-be-built destination resort casinos.

But as the session progressed, the chances of passing a measure for casino gambling appeared to grow slimmer. And now, Montford’s group, which advocated legislation in 2011 to permit slot machines at tracks, has returned to its old way of thinking.

“This was the position we originally took,” Montford said. “I do believe that this is a reasonable approach.”

The goal has always been the same: to get a gambling-related bill through the Legislature and have the matter put in front of the voters of Texas, the former senator said.

[…]

While it is always difficult to gain approval for gambling legislation from the Texas Legislature, some factors at play now could help, Montford said.

For one, there is growing support among Republicans in the House for slot machines at racetracks, he said. Recently, John Kuempel of Seguin and Rep. Ralph Sheffield of Temple signed on to a slot bill by Rep. Richard Raymond, D-Laredo. Montford said he was encouraged that more members are willing to allow constituents to vote on a gambling initiative.

Montford is also happy that a slots-at-tracks measure by Sen. Juan “Chuy” Hinojosa, D-McAllen, has been assigned to the Senate Finance Committee, where more senators could hear the testimony.

See here and here to compare what’s being said now to what was said before. I have my doubts that this was a consensus decision, since the casino interests and the horse racing interests have generally not been on the same page in the past, but whatever. I’ll believe there’s movement when something gets passed out of committee. As it happens, while there are three pieces of legislation relating to expanded gambling – the latest, SJR64 by Sen. John Carona, was filed this week – none have yet been scheduled for committee hearings.

The other players in the game, notably the big Las Vegas casino companies, might be quiet now, but that doesn’t mean they have lost hope in the long run.

Some gambling proponents could see an opportunity if there is a special legislative session, as expected, focusing on financing public schools.

If lawmakers are scrambling in a special session for new money to comply with an expected court order to put more money into education, then casinos are “more optimistic for serious consideration,” said John Pitts, a lobbyist for several large casino interests.

Maybe. A scenario where more revenue is required and there’s no two ways around it is probably a prerequisite for any expansion of gambling to happen. I still think it’s highly unlikely, but I suppose anything is possible. I wouldn’t bet on it, though. The equally pessimistic Burka has more.

It may not matter where the casinos are

I don’t know if the gambling industry will finally gain traction in their effort to legally expand operations in Texas, but I do wonder if they’re fighting the last war and missing out on what’s happening now elsewhere in the country.

Silicon Valley is betting that online gambling is its next billion-dollar business, with developers across the industry turning casual games into occasions for adults to wager.

At the moment these games are aimed overseas, where attitudes toward gambling are more relaxed and online betting is generally legal, and extremely lucrative. But game companies, from small teams to Facebook and Zynga, have their eye on the ultimate prize: the rich American market, where most types of real-money online wagers have been cleared by the Justice Department.

Two states, Nevada and Delaware, are already laying the groundwork for virtual gambling. Within months they will most likely be joined by New Jersey.

Bills have also been introduced in Mississippi, Iowa, California and other states, driven by the realization that online gambling could bring in streams of tax revenue. In Iowa alone, online gambling proponents estimated that 150,000 residents were playing poker illegally.

Since that story was published, the states of Nevada and New Jersey have passed their laws to allow online gambling. I’m sure others will follow. Now, online gambling will never truly replace casinos. No matter how good the online experience may become, it won’t include low-cost buffets, cocktail waitresses, or Wayne Newton. Some things you still have to do in person to get the full effect. But online gambling is sure to cut into the profit margins of casinos, and perhaps reduce the overall market for them. If so, that weakens the case for expanded gambling here, at least as far as the current proposals for casinos and slot machines at racetracks go. Of course, the current proposals can be amended to allow a vote on online gambling. I don’t know if the spirit of cooperation that exists now can handle that, but who knows. In any event, this is something to keep an eye on.

Gambling has always polled well

In addition to their self-reported efforts to work together, the pro-gambling expansion forces have released a poll showing public sentiment on their side.

A poll paid for by Let Texans Decide, a pro-gambling group made up of interests that wanted slot machines at racetracks last session, asked 1,001 registered voters in Texas: “Regardless of your views on gambling, would you support or oppose allowing Texas voters to decide on a constitutional amendment to allow the expansion of gaming in Texas?”

The answer was a loud “yes.”

Of all respondents, 82 percent said they’d support being able to vote on a constitutional amendment to allow gambling, and 78 percent of Republican primary voters — the folks that, let’s face it, decide our statewide elections — also supported the idea of putting gambling to a public vote, according to poll results.

[…]

The poll was conducted by Wilson Perkins Allen Opinion Research, the same firm that did the surveys for U.S. Sen. Ted Cruz during his run for the Senate last year.

Respondents were contacted by phone between Jan. 27 and Jan. 30. The margin of error is ±3.1 percent, with an oversample sufficient to achieve 511 Republican primary voters with a margin of error +4.4 percent.

You can see the poll memo here, and crosstabs can be found here. There are two points to note. One is that asking people whether they favor voting on something is not the same as asking them if they favor the thing they’d be voting on. I suspect most propositions would get a favorable response to the question “should the people be allowed to vote on this”. Two, previous polls on the subject have generally shown a positive response from Texans towards expanded gambling. This 2009 Baselice poll found that 63% of respondents favored allowing slot machines at horse and dog racetracks, with 82% being in favor of being allowed to vote on the question. This 2010 Texans for Economic Development poll found that people preferred slot machines at racetracks as a way to raise revenue by a 57-22 margin over increasing taxes. None of that has made any difference in the Legislature in the past, and the safe bet is that this poll won’t make any difference, either. But there you have it anyway. Hair Balls has more.

One big happy pro-gambling expansion family

If the pro-gambling forces in the state all join hands and agree to work together, will this finally be the year that gambling expansion gets a vote? Maybe.

John Montford, chairman of Let Texans Decide, a coalition of gaming companies, track operators, trade groups and others who want Texas to legalize casinos, has met with groups representing casino and slot machine interests and is optimistic that they could agree on potential legislation that would bring a constitutional amendment on gambling before Texas voters.

“We’re working hard to build coalitions in favor of a referendum,” said Montford, a former state senator from Lubbock and the author of the legislation that created the Texas Lottery. “The members of the Legislature don’t have to be pro- or anti-gaming to support a referendum. We want people to have a fair say so.”

Efforts at such collaboration are not new in the industry, though they haven’t proved successful in bringing a proposed amendment to voters on creating casinos, allowing slot machines or other such gambling measures.

But those interests haven’t always been on the same page. Some previous efforts have come undone when race track and casino proponents battled to get a competitive advantage built into proposals pending in the Legislature.

In recent sessions, conflict between bills that would have allowed slot machines at horse racing tracks and those that would allow resort casinos have been part of the reason no such legislation made progress. Competing lobbyists and dollars sent mixed messages to legislators who may not have been keen to promote gambling in the first place out of fear of alienating anti-gaming voters.

See here for the story so far. Hard to know what to make of this, since Montford appears to be the sole person speaking on behalf of Let Texans Decide. The story notes that Sen. Rodney Ellis’ SJR6, which would allow a vote on various forms of gambling, is what’s being talked about now. It also notes that the horse racing interests are pursuing their own bill, though they may be willing to support SJR6. So yeah, not clear whether this session represents a change of tactics or just more of the same and hoping for a different outcome.

Time once again to talk about expanded gambling

There’s a legislative session coming up, right? That can only mean one thing: A new effort to expand gambling in Texas.

Track and gaming interests say voters should be allowed to decide whether to give Texas a shot at the benefits of $2.5 billion they say is wagered in surrounding states annually by Texans.

“They are taking our money to fund their programs, and I think they frankly have just been smarter than we have. My hat’s off to ’em,” said John Montford, a former state Senate Finance Committee chairman. He carried the legislation that established Texas’ lottery and now is involved in the casino battle.

Critics doubt the figures and call expanded gaming a losing proposition for Texas, saying gaming would take money from the pockets of people who can ill afford it.

Montford has been hired by the partnership of Penn National Gaming and Sam Houston Race Park to push the gambling expansion under the name of Let Texans Decide.

Among supporters listed on the group’s website are Valley Race Park, the Texas Association of Business, the Greater San Antonio Chamber of Commerce, Greater Houston Women’s chamber, Houston Hispanic chamber and Houston Northwest.

Remember the name Let Texans Decide, whose Facebook page is here. Whatever arguments or talking points you hear for expanding gambling in Texas will have come from them.

The Legislature has repeatedly turned down the chance to amend the state constitution to expand gambling, which would require a two-thirds vote of lawmakers before going on a state ballot.

The battle doesn’t look to be any easier this time.

State lawmakers who faced a huge revenue shortfall in their last regular session in 2011 now are seeing a recovering economy, and the House and Senate are no less conservative. Several incoming senators are viewed as further right than their predecessors.

“Before this session, there was probably a shot at passing something like that through the Senate. I think with the new members that we have in the Senate, it’s probably less likely than it was before. And I think it is very unlikely that either one of those proposals would get through the House,” said Senate Finance Committee Chairman Tommy Williams, R-The Woodlands, when asked about slots at tracks or casinos. Williams said he has never voted to expand gaming in Texas, adding that revenue figures presented in years past by supporters of the idea appeared unrealistic.

“I don’t have a big, huge moral objection to it, but I’m not sure it’s for the benefit of the state,” Williams said.

Dale Craymer, president of the business-based Texas Taxpayers and Research Association, said, “One of the considerations for casino gambling is the fact that it raises revenue, and that’s a big issue during a session when they are looking for revenue. This is not going to be a session where they are looking for revenue.”

Yes, God forbid we should seek out any new revenue sources any time outside of a severe crisis, not that we do then either. I’m not saying that more gambling is the way we should go to raise more revenue for the state, I’m just saying we’re a million miles from being at a point where we can say that we don’t need any more revenue sources. Between water, transportation, Medicaid, mental health services, education, and a whole host of other needs, there are plenty of issues in need of more funding.

Texans for Public Justice, which tracks money in politics, found that gambling interests donated $1.6 million to Texas political action committees and candidates going into the 2010 elections.

TPJ, in a check of reports available for this year, found top gambling PACs from 2010 donated more than $904,000 this cycle. The total included only reports covering up until eight days before the election, so the total is sure to be higher.

According to Let Texans Decide, the Chickasaws and Choctaws, which have Oklahoma casino operations, have given Texas candidates five times as much as they gave Oklahoma candidates since 2008 — more than $807,000 in Texas compared to nearly $152,000 in Oklahoma. The Chickasaws also have invested in a Grand Prairie track.

There may not be money for the things Texans need, but there’s always money for the campaigns. As always, keep an eye on that as the debate progresses. There’s a scandal lurking out there somewhere.

More on the economic effect of casinos

I’m just noting this for the record, since I am sure that gambling expansion will come up again in The Lege this spring.

Melissa Kearney, an economist at the University of Maryland, released a literature review in 2005 summarizing work on gambling done to date. A study by Maryland’s William Evans and Julie Topoleski that focused on Indian casinos found that they created a significant number of jobs. The ratio of jobs available to adults increased, on average, by 5 percent. This in turn lead to a 2 percent decline in mortality, as residents’ economic conditions improved.

But the casinos also lead to a plethora of social ills, including increased substance abuse, mental illness and suicide, violent crime, auto theft and larceny, and bankruptcy. The latter three all increased by 10 percent in communities that allowed gambling.

Other work backs up the crime finding. The University of Georgia’s Earl Grinols, Baylor’s David Mustard, and the University of Illinois’ Cynthia Dilley found that 8 percent of crime in counties with casinos was attributable to their presence, a crime increase that cost residents, on average, $65 a year.

And the bankruptcy finding has been replicated as well. The St. Louis Fed’s Thomas Garrett and Mark Nichols found that Mississippi riverboat gambling increases bankruptcies not just in Mississippi, but in counties outside the state where many residents gamble in Mississippi. The effect was largest in neighboring states, with the Mississippi casinos responsible with a 0.24 percentage point increase in bankruptcy filings. Interestingly, other casinos — such as Las Vegas, Atlantic City, and so forth — didn’t have statistically significant effects on other areas’ bankruptcy rates.

Unsurprisingly, legalized gambling also exacerbates problems with gambling addictions. The National Gambling Impact Study Commission found that having a casino within 50 miles doubles one’s likelihood to become a problem gambler. That suggests that the new DC-adjacent Maryland casino could create major addiction problems here in the District.

The evidence on casino gambling’s distributional impact is much weaker than that concerning state lotteries, but there is extensive evidence that the latter amounts to a regressive tax, given that lottery ticket purchasers are disproportionately poor. But some evidence — admittedly from industry groups — suggests that casino-goers are richer than the average American, so the story could be quite different than with lotteries.

But as with the liquor industry, much if not most of the gambling industry’s revenue come from addicts. Grinols estimates that 52 percent of revenue at the typical casino comes from problem gamblers, while an Ontario study put the figure at 35 percent and a Louisiana one at 42 percent. So even if gambling takes more money from the middle-class than the poor, it largely takes that money from middle-class people who aren’t exactly rationally willing to spend it.

Casinos aren’t even a particularly good source of tax revenue. Kearney notes that a number of studies have found that Indian casinos cannibalize business at nearby restaurants and bars, and in so doing actually reduce state tax revenue.

Some of these studies are several years old, so it is certainly possible that things have changed. I’m sure the casinos and racetracks will have their own data to add to the debate as well. Given that there’s already a lot of casino-like gambling going on in Texas, it may be that we’re already suffering most of the ill effects we’d see with casinos without getting any of the benefits. Like I said, I’m just noting this for future reference when the subject comes up again.

Baccarat

I’m fascinated by this story.

Hours after a judge ordered the Golden Nugget Atlantic City to let gamblers cash in nearly $1 million worth of chips they won in a card game where the decks were unshuffled, the casino’s owner overruled his lawyers Friday and agreed to make the payments.

The judge’s decision drew an angry reaction from casino officials, who called it “an ambush” and vowed to file an appeal first thing Tuesday morning.

But Tilman Fertitta, the Texas billionaire who owns the Golden Nugget, said he decided to pay the winners to make the whole thing go away.

“Without question, the mini-baccarat game that took place on April 30, 2012, allowed $10 bettors to realize a gambler’s dream and enabled them to beat the house out of $1.5 million,” he said. “Even though we can appeal the court’s ruling and take full advantage of the appellate process and legal system, and tie the matter up in litigation for a number of years, the Golden Nugget is a people business, and is prepared to allow the gamblers — most of whom continue to gamble at Golden Nugget — to realize the gambler’s dream of beating the house.”

The casino also will let gamblers keep more than a half-million dollars it already paid them from the same disputed games.

“I wasn’t cheating,” one of the gamblers, 51-year-old Michael Cho of Ellicott City, Md., said after the judge’s ruling. “I didn’t do anything illegal. It wasn’t right for them to get the money.”

I know nothing about baccarat, but obviously in any such game if you can tell what cards are coming, you’re going to do well. As Cho said, the players weren’t cheating, just very lucky to be in the right place at the right time. It was correct for the casino to pay them off and go after the cardmakers for recompense. I guess you can keep this story in mind the next time you sit down at a casino table. Maybe some day the cards will all be right for you, too.

Anti-tax zealots plump for casinos

Gambling yes!

Grover Norquist, the nation’s most prominent anti-tax crusader, wrote a letter last week to Texas legislators to call for expanded gambling.

“In light of the adverse economic impact that higher taxes would have, it is imperative that lawmakers consider all other options for balancing the state’s budget,” Norquist wrote. “There are a number of alternatives to raising taxes, the most preferable being an expansion of economic activity, and thus, the tax base. One way to do that would be to permit legitimate businesses to operate that are currently not allowed to do so. Research has found that permitting lawful and responsible gaming operations in Texas is one simple way to grow the Texas economy, thereby generating more tax revenue for the state.”

Representatives from groups that tried to pass gambling measures in the 2011 legislative session said they had nothing to do with the letter.

Gambling no!

The Texas Public Policy Foundation’s executive director, Arlene Wohlgemuth, and it director of fiscal policy, former state Rep. Talmadge Heflin, sought to counter a pro-gambling letter sent to state leaders last week from anti-tax crusader Grover Norquist, the president of Americans for Tax Reform.

[…]

“While we generally agree with our friends at ATR on tax and spending issues, when it comes to gambling, that is not the case. Their suggestion that gambling is a way ‘in which to rectify the anticipated budget imbalance’ is wrong,” Wohlgemuth and Heflin wrote.

The foundation’s preferred approach would lean more toward fiscal discipline as the state faces the likelihood of another budget shortfall ahead of the 2013 legislative session.

I’m generally agnostic to deeply ambivalent on the gambling question, but if those are my choices I say bring on the casinos and the racetrack slot machines. There are of course other choices, just not ones that these one-percenter chuckleheads are interested in. As we well know, we’ll need a better legislature for any other options to get traction.

Beyond that, I have no idea if any of this will make a difference or not. Neither argument is particularly original, so at this point it’s more a matter of which article of faith one subscribes to. The real question at this point is whether or not gambling will have a higher profile in 2013 than it did in 2011. My money’s on yes.

Casinos expanding nationally

I have no idea what the political or budgetary climate will be like for the gambling industry here in Texas when the Lege next convenes in 2013, but they have been gaining a lot of ground elsewhere in the country.

You got to know when to hold em...

States have embraced casinos, after years of trepidation about their societal costs, for two simple reasons: a promise of a rich new revenue source, plus the possibility of stimulating tourism.

“They are faced with tough decisions. They are in recession … And we pay taxes far over and above normal taxes,” said Frank Fahrenkopf, president of the American Gaming Association.

Last week alone, Genting’s new gambling parlor at Aqueduct, now limited to 4,500 video slot machines and another 500 electronic table games, made nearly $13 million — putting the “racino” on pace to make $676 million per year, with 44 percent of that take going to a state education fund.

And that total is nothing compared to the $1.4 to $2 billion per year Genting predicts it would bring in at the huge complex it is planning in Miami.

Some experts, however, have questioned whether revenue bonanzas that large are realistic, and say states should be cautious about giving up too much to lure these projects. Competition for a limited pool of gambling and tourism dollars is already fierce, and recent years haven’t been kind to casinos.

Nevada’s larger casinos lost $4 billion in 2011, according to a report released this month by the state’s Gaming Control Board, as the state continued to feel the effects of the global economic slump.

As gambling options have increased in the East, revenue has slid substantially at the pair of Indian tribe-owned casinos in Connecticut and declined by a dramatic 30 percent in Atlantic City, which has lost customers in droves to the new casinos in nearby Philadelphia, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas.

Other than that one mention of Nevada, the story is entirely East Coast-focused, so I can’t say what kind of action there may be in these parts. No question, Texas is a big prize, and I’m sure there will be yet another large push for casinos, slot machines at racetracks, or both. There’s also been a push for online gambling of late, which may add a new wrinkle to the usual legislative battle. As always, worth keeping an eye on.

We do have casino gambling in Texas

With all the talk about slot machines at horse racing tracks and legalized casinos, it’s easy to forget that there already is one legal casino in Texas.

As the busloads of seniors and other low rollers pulled in from San Antonio for a day of gaming at the Lucky Eagle Casino, demolition crews were busy tearing down an adjacent concrete dome.

If all goes well, by mid-2013, a new 250-room hotel and expanded casino will take the place of the ill-conceived dome built for concerts and boxing matches by an earlier tribal administration.

The scene neatly captures the dramatic changes of the past decade for the Kickapoo Indians, who still offer the state’s only casino gambling on their small reservation by the Rio Grande.

Peace and prosperity have replaced the upheaval, legal battles and insolvency that not long ago bedeviled the Kickapoo, allowing them to launch an ambitious development project that includes improved gaming facilities.

“The tribe is in extremely good health economically. We’re doing a $90 million improvement project, of which we’ll borrow about $50 million, with the rest coming from the tribe,” said tribal administrator Don Spaulding.

[…]

The money machine that makes it all possible, of course, is the glittering casino that never closes. Restricted to what is known as Class II gambling, one notch below Las Vegas-style gaming, the casino offers machine games, poker and bingo, and it caters to clients from San Antonio and the Rio Grande Valley.

The tribe divulges little financial information, but did report that last year its casino had more than 1.1 million visitors and paid out more than $30 million in winnings.

“On July 23, we had a million-dollar winner. I think that was the biggest prize the casino has ever had,” said casino manager Robin Miller.

The facility will soon hold 2,500 gaming machines, up from 1,500 when Miller arrived two years ago.

With the planned improvements, she said, the Lucky Eagle will be more competitive with the big casinos in Oklahoma and Louisiana. And when the hotel opens, players will be able to make it more than a day trip.

I’m curious what, if anything, is the state’s take from this. If nothing else, the numbers from this casino, before and after expansion, will provide some objective basis for evaluating what a Texas with more legal gambling might look like.

States looking at online gambling

Until the economy returns to the point where states aren’t completely strapped for revenue, I expect them to look at all possible sources of new money.

It’s an idea gaining currency around the country: virtual gambling as part of the antidote to local budget woes. The District of Columbia is the first to legalize it, while Iowa is studying it, and bills are pending in places like California and Massachusetts.

But the states may run into trouble with the Justice Department, which has been cracking down on all forms of Internet gambling. And their efforts have given rise to critics who say legalized online gambling will promote addictive wagering and lead to personal debt troubles.

The states say they will put safeguards in place to deal with the potential social ills. And they say they need the money from online play, which will supplement the taxes they already receive from gambling at horse tracks, poker houses and brick-and-mortar casinos.

“States had looked at this haphazardly and not very energetically until the Great Recession hit, but now they’re desperate for money,” said I. Nelson Rose, a professor at Whittier Law School, where he specializes in gambling issues.

When it comes to taxing gambling, he said, “the thing they have left is the Internet.”

I don’t really expect this to come up in the Texas Lege in 2013, because casino and horse racing interests have too much at stake to let it happen. While I am not an advocate of expanded gambling myself, if it ever does happen in Texas I would prefer it to be in the form of real casinos and/or slot machines at racetracks, on the grounds that they would provide more jobs than online gambling. Having said that, once this is up and running somewhere, it’s not really clear to me how you could prevent someone in Texas, or anywhere else, from playing.

There are other ways that a state could leverage the Internet to feed its own gambling habit:

Some states, including New York and North Dakota, already sell lottery subscriptions online. Since 2005, New York has offered a subscription service that allows people in the state to enter a string of Lotto or Mega Millions drawings. The state says 100,000 people subscribe.

New York is exploring whether to allow people to draw from an escrow account when they decide to buy into a single drawing — say, when the jackpot reaches alluring levels.

Again, I can’t recall hearing of anything like this in Texas. Unlike the virtual casinos, I could imagine something like this being implemented by the Texas Lottery Commission, without direct input from the Lege. I wonder if they haven’t thought of it, or if they think it’s illegal for them to try it. Anyone know anything about that?

Is there still a chance gambling legislation can pass the Senate?

All signs still point to “no” if you ask me, but gambling legislation never goes quietly so it might look otherwise on the surface.

The quiet formation of a special Texas Senate subcommittee to consider a controversial casino gambling resolution has sparked a behind-the-scenes fight that could affect passage of the state budget and school finance legislation .

Three senators said several colleagues have discussed the possibility of voting against the state budget, amid the questions. They did not want to be identified because those discussions were private.

“I’m afraid that this gambling issue is being raised and it could hold the schoolchildren of Texas hostage so the gambling interests can get their issue passed,” said Sen. Jane Nelson, R-Flower Mound. “I am fully prepared to talk about this issue for a long time. It would really be wrong to use gambling money to finance public education in this state.”

Five senators confirmed Monday that the new panel formed Thursday by the Senate State Affairs Committee to hear a gambling resolution by Sen. Rodney Ellis, D-Houston, quickly triggered concerns from GOP senators about whether the move was a prelude by proponents of casinos to shoehorn the issue into legislative discussions about how to pay for Senate-proposed changes in financing public schools — expected to cost about $4 billion more than the House version.

[…]

Ellis said Monday that he has withdrawn his request for a hearing, leaving the new panel with nothing to do.

“I can see the handwriting on the wall,” Ellis said. “I don’t think this is the right time to try to advance this. I can see I don’t have the votes.”

Seems like a lot of sound and fury to me. There’s some suspicion that a few Senators might vote against the budget, or at least threaten to, unless a gambling bill gets passed, but I don’t think it will come to that. Anything can still happen up to the point where a budget passes, but I don’t see it for gambling. The point I raised before the session began, that this Legislature is inherently less friendly to gambling than the previous Lege was, still stands. I have yet to see any statement from a known gambling opponent who is now willing to reconsider. Maybe in the next Legislature.

Some gambling advances in the House

It’s probably too little too late, but you never know.

A Texas House committee surprised the casino lobby Friday night when it voted out legislation that would allow video lottery terminals — slot machines — at state racetracks and Indian reservations. The casinos were left behind.

Casino interests wanted any legislation approved by the House Licensing and Administrative Procedures Committee to also allow destination casinos in major cities and on the state’s barrier islands.

Rep. Mike “Tuffy” Hamilton, R-Mauriceville, said he still doesn’t have the 100 votes required in the House to advance the constitutional amendment his committee approved.

[…]

The bill approved by the committee includes a constitutional amendment and the legislation putting it into effect if it passes. Those bills, by Rep. Beverly Woolley, R-Houston, would allow VLTs at dog and horse tracks and on reservations and would raise $548.2 million for the next budget.

The legislation in question is HJR111 and HB2111. I still don’t see any evidence that the Senate is willing or able to pass similar legislation, and without assurance of at least a vote in the Senate it’s not clear that enough House members will commit to voting for it. So as always, I don’t really expect anything to happen. Click over to the link to see statements from the casinos (short version: boo!) and the racetracks (short version: yay!) about this development.

House says it may be close to approving expanded gambling

This would be as far as they’ve gotten in recent sessions.

Rep. Mike “Tuffy” Hamilton, R-Mauriceville, who chairs the Licensing and Administrative Procedures committee, said he is close to having enough votes to pass his ever-morphing gambling bill.

As Hamilton seeks to gather a comfortable number of “aye” votes, he and his committee members have been working to change the bill to make it more palatable for on-the-fence lawmakers who might oppose slot machines at race tracks and full-scale casinos at various places across Texas.

“I think that we have a really good chance right now,” Hamilton said. “We’re really close in the numbers.”

One way to gain support in this revenue-hungry Legislature is to promise to feed the state coffers.

Hamilton said he expects the bill to add about $3 billion of general revenue in the 2012-2013 biennium. The bulk of the money would come from $2.4 billion in licensing fees from groups seeking to slots at race tracks and would-be casino operators.

Hard to know what that means. I guess we’ll find out when and if it gets voted out of committee. Of course, Sen. Robert Duncan says there’s no support for gambling in his committee, so this may all be academic. My expectation is the same as before, that ultimately no action is taken.

Gambling interests tout job creation benefits

From the inbox:

REPORT OUTLINES 77.5K JOBS BY REGION, SECTOR CREATED BY SLOTS BILL

Confirms Texans Continue To Spend Billions Gaming in Neighboring States

AUSTIN, Texas – Win For Texas released a new report today outlining the specific regions and sectors of the 77,500 new, permanent jobs that will be created when slots are allowed at Texas horse and greyhound tracks and recognized Indian reservations. TXP, a Texas economic policy consulting group, prepared the study.

The study also details the $2.7 billion dollars Texans spend on gaming in a seven state region every year. TXP estimates that $2.2 billion of this “leakage” could be kept here simply by allowing slot machines at existing racetracks and Indian reservations.

“TXP estimates that approximately $2.4 billion in gaming revenue (and $3.8 billion total) would appear in-state by the end of 2013,” said TXP President, Jon Hockenyos. “This in turn would create $8.5 billion in total economic activity, $2.6 billion in earnings, and about 77,500 permanent jobs.”

The new report breaks down the specific economic and job creation into five regions: Austin Area, DFW, Houston and the Rest of Texas.

“The economic benefits of implementing slots are well-distributed across the state, as Dallas-Fort Worth and Houston each stand to gain close to 20,000 permanent jobs, Austin and San Antonio will realize approximately 10,000, and the balance is distributed across the rest of Texas,” said Hockenyos.

The legislation that would bring this proposal to Texas voters to decide is HJR 111/ SJR 33. The enabling legislation that details the implementation and oversight are HB 2111/ SB 1118.

The study was commissioned by Win For Texas and is attached in its entirety. For more information about this proposal or Win For Texas, please visit www.winfortexas.com.

Please see the report for your region’s specific benefits. The TXP report is attached and may also be downloaded here: http://www.winfortexas.com/TXP_Regional_Impact_Slots_Tracks_Spring_2011.pdf

I will simply note that TXP issued a similar report in 2009, which I blogged about here. I’ll leave it to you do compare the two and see what differences there are. Hey, we’ll need something for all those soon to be unemployed people to do.

As for the ubiquitous question of gambling’s prospects in the Lege, it doesn’t look any clearer now than it did before the session. The good news for gambling interests is that a consensus bill may emerge from the House.

A Texas House committee will listen to several gambling proposals at a hearing today , and in the coming days, the chairman of the committee will take all the proposals and roll them into one measure.

The forthcoming piece of all-encompassing legislation by Rep. Mike “Tuffy” Hamilton, R-Mauriceville, could lead to seven new Las Vegas-style casinos, slot machines at 13 horse and dog tracks across the state, slots at a few Indian reservations and slots at bingo halls across Texas, he said.

“Something for everybody,” Hamilton said. “We’ll put them all together.”

But there are competing gambling interests in Texas, and getting them to work with one another could prove difficult; casino proponents and the group wanting slots at tracks have not been able to work together this session or in sessions past.

There are also pro-gambling groups representing bingo halls and Indian reservations.

Hamilton, though, said he can get them all together.

Asked how he’d reach a consensus among the competing groups, Hamilton said, “Because I’m the chairman, and there will be just one bill passed out of committee.”

Whether that’s a bill that makes the casino interests, the racetrack interests, and the Indian tribes happy or one that makes some or all of them feel disgruntled remains to be seen. It’s also not clear that this consensus bill, or any other gambling bill, will get a hearing in the Senate.

While a new statewide poll shows that 86 percent of Texans believe the public should vote on whether to legalize casinos, an influential state Senate chairman with jurisdiction over gambling said Monday he has no intention of advancing the necessary legislation.

“There is no support in my committee,” said state Sen. Robert Duncan, R-Lubbock. “I just don’t think there are the votes in the Senate. I don’t see any chance of passage.”

Duncan’s opposition signals almost insurmountable odds for the expansion of gambling in Texas, despite the industry’s hopes that lawmakers would look favorably upon casinos this year as a solution to the state’s fiscal crisis.

So far, Lt. Gov. David Dewhurst has referred all gambling resolutions and bills filed in the Texas Senate to the State Affairs Committee, which Duncan chairs.

His spokesman, Mike Walz, said Dewhurst also likely would refer all “stand-alone” gambling bills passed by the House to Duncan’s committee. He noted that the issue could be attached to other significant legislation that traditionally is heard by other committees.

So the door isn’t completely closed, but it’s far from wide open. I thought gambling’s odds may have improved somewhat after the terribly austere Pitts and Ogden budgets first surfaced, but this doesn’t lend support to that thesis.

As for the poll mentioned in the story, there’s no details or references to the poll data, and I’m not interested in seeking them out. We’ve seen plenty of polling data that suggests Texans support the idea, so this is no revelation. I still think the fundamental issue is a lack of legislators that support it. If Hamilton’s “consensus” bill never makes it to the House floor, that will tell you all you need to know. The Trib, Texas Politics, and Postcards have more.

Horse racing folks feeling good about gambling’s chances this time

They always say that, but maybe this time they’re right.

The chief executive officer at Retama Park expressed cautious optimism Thursday that the state could one day allow slot machines at horse racetracks, a move that has long been deemed as critical to the financial well-being of a struggling industry in Texas.

Retama CEO Bryan Brown made his comments in the wake of legislation introduced in Austin earlier in the day.

[…]

Brown said he has never felt better about the prospects that the track in Selma, in operation since 1995, could build an alternate facility on site that would house slot machines.

“This has been a work in progress,” Brown said. “And, you know, a lot of times (during this process) we’ve been excited. A lot of times we’ve been down about the prospects. But we’ve never felt this good about what might happen.”

As noted before, I’m rethinking my pessimism about gambling. The budget issues may just be enough to overcome legislators’ resistance to it. I still think it’s an underdog, I still think the horse racing interests and the casino interests will ultimately work at cross purposes as they always have – see the last paragraph of this story for an example of what I mean – and I retain the right to my skepticism until someone shows me at least one legislator who’s flipped on the issue, but I do see a possible way forward now, which I had not seen before.

Legislation to allow slot machines filed

Fresh from the inbox:

BI-PARTISAN LEGISLATION FILED TO ALLOW STATEWIDE VOTE ON SLOTS AT TEXAS TRACKS, INDIAN RESERVATIONS

AUSTIN, Texas — Texas State Senator Juan “Chuy” Hinojosa (D-McAllen) and Texas State Representative Beverly Woolley (R-Houston) filed legislation today to allow Texas voters to decide whether to allow slot machines at existing horse and greyhound tracks along with federally recognized Indian reservations.

Both Legislators filed Joint Resolutions (HJR 111, SJR 33) that would trigger statewide constitutional amendment elections as well as the corresponding enabling legislation (HB 2111, SB 1118) detailing the proposal.

“For years Texas has missed out on billions of dollars in gaming and entertainment revenues while neighboring states pocket the winnings,” said Senator Hinojosa. “This proposal is the first major revenue generating proposal of this session – it will help keep the money we lose to other states in Texas, and put new revenues on the table without increasing taxes.”

Economic studies indicate that the legislation as proposed would bring in about $1 billion a year in tax revenue and create more than 77,000 Texas jobs across a wide variety of sectors. Currently, Texas loses revenue to Louisiana, Oklahoma and New Mexico at a rate of $2.5 billion a year.

“The people of Texas should have the opportunity to decide whether or not to add slot machines to Texas’ racetracks and federally recognized Indian reservations,” said Representative Woolley. “This legislation gives Texans a voice to decide our economic future.”

In a recent poll conducted by Baselice and Associates, Inc., 82 percent of Texas voters favored the right to vote on adding slot machines to racetracks and federally recognized Indian reservations. Sixty four percent favored the specific proposal. Support was evenly spread across all partisan and demographic subgroups.

For more information, please visit www.winfortexas.com

Here’s HJR 111, SJR 33, HB 2111, and SB 1118. You can read more about that Baselice poll here; a similar poll from 2009 found a nearly identical result. Finally, here’s a DMN story about the newly-filed bills.

You know what my opinion is of how likely any such measure makes it out of the Lege, so I’ll spare you another accounting of it. I will say this, though. Lately, we’ve started to see Republican legislators not only embrace the idea of using at least some of the Rainy Day Fund to ease the budget cuts a bit, we’ve also seen one Republican make the case for some form of tax increases, too. Sen. Deuell is still out on a pretty lonely limb right now, but the mere fact that he’s there is remarkable. I certainly wasn’t expecting it. As such, I must consider the possibility that I’m overestimating Republican resistance to gambling legislation. I still want to see some news story showing new House members being on board with this, or former opponents of gambling stating their willingness to vote for a particular measure this time around before I really change my mind. But for the first time, I’m beginning to think that it’s within the realm of the possible that something might pass. Postcards has more.

UPDATE: And now there’s a casino bill, too.

Rep. José Menéndez, D-San Antonio, filed a casino gambling bill in the Texas House. He filed it hours after Rep. Beverly Woolley, R-Houston, filed another bill that would allow slot machines at racetracks.

Companion bills were also filed in the Senate. Sens. Juan “Chuy” Hinojosa, D-McAllen, and Jeff Wentworth, R-San Antonio, filed the slots bill. And casino proponents said Sen. Rodney Ellis, D-Houston, filed a casino bill.

House Joint Resolution 112, which is supported by the Texas Gaming Association, would call for an election on a constitutional amendment that would allow the creation of a five-person Texas Gaming Commission. A fiscal note has not been published.

Once created, the Texas Gaming Commission would issue up to eight licenses to operate slot machines at racetracks.

It also would issue up to six licenses for casino gaming in different urban areas in Texas.

Additionally, the bill also would allow the commission up to two licenses for casino gaming on islands in the Gulf of Mexico.

The commission would also allow an Indian tribe to operate slot machines or have casino gambling.

Here’s HJR 112, and here’s a statement from Sen. Ellis about his bill, SJR 34.

Another story analyzing gambling’s odds in the Lege

I have three things to say about this story.

[W]ith a budget crisis looming — and funding to public education, health care and other state services on the chopping block — gambling opponents aren’t taking any chances.

Both sides have said legalizing gambling could generate at least $1 billion in state revenue, which lawmakers could dole out as they see fit. Even with a more conservative Legislature this year, some believe a billion-dollar temptation could sway more lawmakers.

“It’s a situation where a lawmaker could hold his nose and say, ‘public education is too important for me to not take advantage of this financial opportunity,'” said Chuck McDonald, a legislative consultant in Austin who has worked on pro- and anti-gambling efforts in the past.

And it’s still the case that getting a constitutional amendment for anything remotely controversial passed is an exercise in counting votes, and I have yet to see an article that really explores what that means in this Lege. The fact remains that a number of legislators who supported expanded gambling – almost all Democrats – lost in 2010. Those votes have to be replaced, and a few legislators who had previously voted No would have to change their minds, since this same effort has fallen apart in previous sessions. Where are those votes coming from? How many House freshmen are open to voting for more gambling? Are there any opponents who may now be reconsidering? I agree that if a referendum makes it onto the ballot that it is a favorite to pass, as public opinion is in favor of the idea now. It’s how a joint resolution gets passed, that’s what we need to know.

Suzii Paynter, director of the Christian Life Commission for Texas and staunch gambling opponent, is bracing for a fight.

“It’s always tempting and there’s always a big push at the capital . . . especially at a time when revenue is short,” Paynter said.

She has polished up her talking points and put together a fact sheet, ready to tell lawmakers why gambling would not be the best way to collect revenue: Unlike the lottery — where the state makes 33 cents for every $1 spent — Texas stands to make only 2 cents on every $1 bet in a slot machine, Paynter said, noting that sales tax is 8 cents to the dollar.

Instead, she argues, taxes on beer and wine could be raised by $1, bringing in $786 million immediately.

“And you don’t need to build anything or plant any palm trees,” Paynter said.

And again, this isn’t an either-or choice. You can raise the alcohol tax and support gambling, and bring in more money now and hopefully in the future as well. That’s assuming the gambling industry is being honest about its potential, which brings me to this:

In Pennsylvania, for example, supporters of legalizing slot machines in 2004, including then-Gov. Ed Rendell, said it would generate $1 billion a year once all 14 casinos authorized by the law were up and running. Ten are open today, while plans to build four others have been stalled by lawsuits, collapsed financing and local opposition. In the current 2010-11 fiscal year, those casinos are on track to provide roughly $800 million in money for tax cuts and additional funds to support civic development projects, the equine industry and local governments.

That was a remarkably accurate projection, especially given the current economic climate. It doesn’t address the social costs of more gambling, of course, but to predict $1 billion in revenue from 14 casinos and get $800 million from 10 is impressive. I’ll consider us fortunate if Texas has a similar experience, if it ever comes to pass. The Trib has more.