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Sports betting at SCOTUS

A case you might want to watch.

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

Poker clubs

I wish them luck.

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

State sues Alabama-Coushatta tribe over casino

Here we go again.

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

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

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

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

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

[…]

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

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

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

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

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

Alabama-Coushatta casino opens

Get your gamble on, y’all.

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[…]

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

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

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

It’s not easy going green

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

Zonker

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

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

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

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

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

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

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

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

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

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

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

Paxton opines against daily fantasy sports sites

I feel confident saying this will be tested in court.

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

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

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

[…]

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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

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

The forthcoming fight over the Alabama-Coushatta casino in Texas

I missed this report from November.

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

[…]

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

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

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

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

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

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

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

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

Paxton was pretty clear about what he thought:

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

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

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

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

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

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

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

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

Pete Rose remains banned from baseball

No argument from me.

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

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

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

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

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

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

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

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

The latest Pete Rose revelations

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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

Q: Got anything else, smart guy?

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

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

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

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

No gambling expansion this session

This should not come as a surprise to anyone.

Casino1

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

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

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

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

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

[…]

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

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

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

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

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

Bill filing deadline has passed

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

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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.

Sports betting

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

On game rooms and gambling

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

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

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

If Atlantic City can go bust…

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

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

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

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

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

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

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

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

Game room lawsuit dismissed

From last week:

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

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

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

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

Attempts to reach Elizondo’s attorney were unsuccessful.

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

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

Game room enforcement back on in Harris County

Better choose your eight liner provider carefully.

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

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

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

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

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

Game room injunction lifted

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

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

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

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

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

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

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

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

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

County enforcement of game room regulations halted for now

Oops.

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

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

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

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

[…]

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

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

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

County to tighten regulations on game rooms

It’s sort of a crackdown, but within limits. And something that’s regulated is something that’s legal, so there’s that.

The regulations, made possible by a state law passed earlier this year by the Legislature, requires an establishment housing six or more video poker machines known as “eight-liners” to obtain a permit and pay a $1,000 annual fee – nearly twice what the city currently charges. The county regulations also would mandate that game rooms operate only between the hours of 8 a.m. and 10 p.m., have untinted windows and a sign on the outside of the building that says “Game Room” in large lettering.

Game rooms that open after the regulations take effect in March must be located at least 1,500 feet away from schools, churches and residential neighborhoods. There are an estimated 300 game rooms in unincorporated Harris County, according to the Harris County Sheriff’s Office.

First Assistant County Attorney Robert Soard said the most substantive change made to the regulations since they first were drafted was exempting “charitable” bingo halls from the distance, window and sign requirements. Those halls that operate “under a license issued by the Texas Lottery Commission” still will have to get permits from the county.

See here, here, and here for the background. The bill in question was HB1127. I don’t think these regulations are too stringent, though a mouthpiece for the gameroom operator claims that enforcing these rules will force a lot of operators underground. You can use that logic to argue against most kinds of regulation, of course. At least a regulated gameroom is one where you don’t have to worry about the cops busting in on you, and it’s one where if something bad happens to you, you can report it to the cops without them asking you embarrassing questions. It’s not like there aren’t differences in quality and openness with the current state of anarchy anyway.

Speaking of the cops, the county has now leapfrogged past the city of Houston in its ability to regulate these things. But they’re willing to share.

While the law allowing the crack down on game rooms applies to all law enforcement agencies within the county, Soard has said the county is allowing the city and other incorporated municipalities with their own law enforcement agencies to opt in to the new regulations through interlocal agreements.

On Monday, he said the Harris County Sheriff’s Office is in discussions with the city about a potential agreement that would allow the Houston Police Department to operate under the county’s regulations.

Notable differences between the county and city regulations include the definition of a game room and maximum penalties for violations.

City ordinance applies to establishments that have more than four eight-liners and imposes a standard Class C misdemeanor maximum fine of $500 for violations; the county’s proposed regulations would impose a penalty of up to $10,000 for every day a violation exists.

The city also has not been able to regulate the location of game rooms because of its virtually nonexistent zoning authority.

I’m not sure what a lack of zoning has to do with anything. Houston has been able to regulate bars, liquor stores, sexually oriented businesses, and plenty of other things. Be that as it may, it makes sense for the county and the cities to sync up on this. It would be better if the state took a unified approach as well, but one step at a time. Texpatriate has more.

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.

Where things stand with two weeks to go in the legislative session

With the Thursday midnight deadline for bills to pass on second reading in the House, I figured this would be a good time to take a look at the status of some major legislation and legislative priorities. There are two weeks left in the regular session, and the specter of overtime is hazy but present. A full list of failed House bills is here, I’m going to aim for the highlights.

Budget – In conference committee. The two chambers weren’t that far apart on how much they spent and what they spent it on, but there were real differences and things have gotten a little testy. Still, I don’t expect there to be too much drama on the basics.

Water and transportation – This is where it has gotten sticky. The Senate passed a joint resolution to allocate up to $5.7 billion from the Rainy Day fund for water and transportation projects, with some extra for public education. The House has rejected this approach, and compounded the issue by failing to pass a bill to fund water projects and pulling a bill to raise vehicle registration fees to pay for transportation matters. Both are stated priorities of Rick Perry, who says we’ll go to a special session if something isn’t done about these things. Complicating matters further is an opinion from AG Greg Abbott that Rainy Day fund spending counts towards the constitutional spending cap. The Senate’s approach would have avoided that, but Speaker Straus says it’s a non-starter in the House. The House would prefer to just vote to raise the cap, which requires only a majority, but David Dewhurst doesn’t want to do that because many Republicans (like him) might get attacked in the 2014 primaries for doing so. It’s quite the dilemma. Everyone is saying that one way or another these things will get done, but it’s not clear to me what the path forward is.

Education – We know that some more money will be spent on public education than in 2011, but the full cuts from 2011 will not be restored, and the final amount that will be added is still up in the air. The charter school expansion bill has not yet been heard in the House, and it’s not clear how it will go. Vouchers appear to be dead. HB5, the big bill to cut back on standardized testing and revamp the high school curriculum, was amended by the Senate after being passed by the House, and is now in conference committee after the House rejected the Senate’s amendments.

Medicaid expansion – Dead. As with all things, there are ways to raise the dead in the Lege while it’s still in session, but it ain’t happening here.

Expanded gambling – Also dead. Check back in 2014, if the Supreme Court upholds the school finance ruling.

Guns – The House did manage to pass a number of gun-expansion bills in the days before their Thursday deadline, including at least one truly demented bill. Many of them likely have no future in the Senate, which ought to make everyone whose bills died on the vine on Thursday from lack of time rethink their priorities (not that it will), but the campus carry bill may get a chance to be heard.

Abortion – A combination of resistance by two normally anit-abortion Democrats to some noxious bills in the Senate and that slow-roll calendar in the House have caused all of the major anti-abortion bills to be held at bay so far. The advocates of these bills in the House at least are unlikely to give up, and I for one have a very bad feeling that if there is a special session for any reason, Perry will add this legislation to the call. If the two-thirds rule is not adopted by the Senate for the special, then that’s all she wrote. If there is a special session, I expect a lot of people will pressure Perry to address this, and I expect he’ll listen to them. I hope I’m wrong, but as I said, I have a very bad feeling about it.

Redistricting – Who knows? I’ve seen several people mention that they have heard Perry will call a special on redistricting, but I have not seen Perry himself mention this, though he has talked about a special for water and transportation if they don’t get done. The idea of a special for redistricting came up late in the 2011 session, so this is certainly a possibility, but in my experience Perry usually telegraphs his intentions. But seriously, I have no idea. For updates on other election-related legislation, see Texas Redistricting.

Criminal justice – I defer to Scott Henson on this.

Beer – In case you were wondering, the craft beer bills were passed by the Senate and thus were not subject to the House Thursday deadline, as that was for House bills that had not yet been heard on the floor. The package of Senate craft beer bills should be heard in the House this week.

That’s about all I can think of. if I’ve missed anything obvious, let me know.

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.

Harris County wants to be like the city in regulating eight-liners

One of the main differences between Houston and Harris County is that the city can generally do what it wants to do while the county had to get a law passed to do the same thing.

When the city of Houston began enforcing stricter regulations on topless clubs and massage parlors, officials saw complaints against those sexually oriented businesses increase in the unincorporated parts of Harris County. Then in 2009, the Legislature granted counties the authority to regulate those kinds of establishments, which law enforcement officials said were operating as fronts for prostitution and human trafficking.

Now, Harris County is seeking similar authority from the state to regulate game rooms outside Houston city limits, which the Sheriff’s Office says have tripled in number in the last five years after the city tightened laws to combat what officials say have become hotbeds for armed robberies, homicides and other illegal activity.

“Our goal here is to make sure our law enforcement has adequate tools to make sure the law is being followed,” said Precinct 4 Commissioner Jack Cagle, who said game rooms are “popping up” in north and northeast Harris County. “Whenever I’m visiting the precinct, the east side in particular, the little ladies in the Baptist church come out and say, ‘Will you please shut down the game hall that’s going on behind my church?’ ”

Bills sponsored by Houston-area lawmakers, modeled after city of Houston ordinances, would require game rooms with five or more machines, known as “eight-liners,” to receive permits from the county, which would inspect them. The bills also would give the county the power to cite violations, which would be elevated from Class C to Class A misdemeanors, as well as limit the location and number of game rooms.

“Whenever the city bans something, then it gets moved out into the unincorporated areas, so we’ve got to be able to deal with some of these less-than-desirable activities in the unincorporated areas, and game rooms are clearly one of them,” said County Judge Ed Emmett.

Sgt. Christopher Montemayor, who supervises the vice unit in the Sheriff’s Office, told state lawmakers earlier this month that Houston-area game rooms have seen 90 aggravated robberies, six homicides – with employees, patrons or security guards as victims – in the past few years.

“These businesses are growing, and we are trying to do something to deter these illegal establishments,” Montemayor said while testifying in favor of House Bill 1127, sponsored by Rep. Wayne Smith, R-Baytown. He added that “25 percent of these robberies go unreported because of the fact of the illegal activity going on there.”

See here and here for some background, and here for HB1127, which is currently pending in committee. I don’t see any obvious reason why it won’t pass, but sometimes these things happen. I just want to note that what Sgt. Montemayor says here about crimes going unreported at illegal eight-liner establishments is pretty much exactly what immigration advocates and law enforcement officials were saying two years ago during the “sanctuary cities” debate, which is that crimes against immigrants in general and undocumented immigrants in particular would increase under such a law since the victims of those crimes would be unwilling to call them in. I’m glad we didn’t have to learn that lesson the hard way.

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.

A look ahead to the 2013 Lege

The Trib previews the biennial hijinks of the 2013 Texas Legislature.

The last time Texas lawmakers convened in Austin, they were absorbed with numbers and boundaries: how to make ends meet with a deflated state budget and draw new district maps the courts would approve.

But with improving fiscal conditions and redistricting mostly in the rearview mirror, they are approaching the 2013 legislative session with some pressing policy questions, from whether to introduce private school vouchers into the state’s public education system to whether they should put in effect — and accept financing for — major provisions of the federal health care overhaul.

Meanwhile, lawmakers will face the consequences of the sweeping cuts and budget-balancing tricks of the 2011 session, including a multibillion-dollar Medicaid shortfall and a lawsuit — expected to be appealed to the Texas Supreme Court early this year and decided in the summer — over how the state finances public education.

The Legislature is also staring down the barrel of some other major investments, from ensuring that Texas has the water to meet its soaring population growth to finding consistent revenue streams for long-delayed transportation projects.

Do not expect a full respite from hot-button issues; lawmakers have already offered legislation to ban abortion after 20 weeks, and to allow teachers to carry concealed handguns in school classrooms. But the Legislature’s Republican majority may take a softer tack toward immigration bills this session, after a national election in which the growing Hispanic population moved even further into the Democratic camp.

Click over and read their list of things to watch for, it’s pretty comprehensive. About the only things I can think of that they didn’t mention were the regularly scheduled push for expanded gambling, a nascent and insane push to eliminate the business margins tax, about which I’ll say more later, and the possibility of further redistricting after the courts have had their say. Check it out.

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.

The state would like for the counties to enforce the law against eight-liners

Apparently, some legislators who don’t much like gambling had a few things to say about that article about eight-liners.

“Eight-liners that provide cash prizes are against the law, and the law needs to be enforced,” [State Sen. Dan] Patrick said in a statement. “Without oversight, illegal game rooms become hot spots for crime.”

Patrick noted that there have been a number of shootings in and outside of game rooms recently.

“The state cannot just look the other way anymore,” he said. “The law must be enforced.”

[…]

[State Rep. Patricia] Harless, who authored a failed bill in 2009 on illegal eight-liners, agreed officials shouldn’t effectively sanction illegal activity by collecting a fee without making sure the businesses operate within the law. “They shouldn’t be able to collect a fee on something that is considered illegal,” she said.

But Harless said there hasn’t been much of an appetite for tougher eight-liner-related legislation in recent sessions of the Legislature. “It’s not a very popular concept,” she said. Too many businesses with legitimate games could be affected if lawmakers pass a measure, she said.

Again, I pronounce myself largely agnostic on the issue. I will say, however, that given the counties’ concerns about the cost of enforcing the anti-eight-liner laws, legislators who are unhappy with their lack of action ought to pony up the resources to help them do something about it. Otherwise, Patrick and Harless ought to accept the fact that they’re just prioritizing and making decisions based on their capacity.