Texas Two-Step
The path to legal sports betting in Texas will be difficult to navigate, and could end with the state legalizing retail betting and saving online for another time.
The Bulletin Board
THE LEDE: Sports betting advocates push for a constitutional amendment in TX.
LEGAL and REGULATORY ROUNDUP: Offshores ignore MS C&Ds; SC sports betting bill; Bet365 lands in IL; NGCB revokes Sibella’s license.
NEWS: Operators push back against a proposed tax hike in Michigan.
VIEWS: MGC requests specific data from sportsbooks on limited bettors.
AROUND the WATERCOOLER: Pretlow to chair New York Assembly Ways & Means Committee, should online gambling supporters be joyful?
STRAY THOUGHTS: Lineup for today’s Congressional sports betting hearing.
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The Lede: Texas OSB Push Puts Constitutional Amendment Front & Center
There will be a massive, knock-down, drag-out fight to legalize sports betting in Texas in 2025. With legislative opportunities limited to odd-numbered years, another swing and miss in Texas push legalization off until 2027, at the earliest.
With the stakes so high, supporters are already coming out to support the 2025 legislative push, and it appears that 2025 efforts will focus on a constitutional amendment.
That includes a prefiled bill by Texas Sen. Carol Alvarado.
Joint Resolution 16 seeks to amend the state constitution to authorize sports betting and casino gaming at "destination resorts." Of note, online sports betting is not expressly part of the legislation.
There is also Eilers & Krejcik Gaming’s report on the Texas opportunity (covered in an earlier newsletter), which will underpin all subsequent arguments. The research was recently referenced by Lauren Clay, spokesperson for the Texas Sports Betting Alliance, who said:
“The data surrounding legalized sports betting in Texas underscores the immense potential for increased tax revenue, job creation, and economic benefits, plus important consumer protections for Texans from risky, unregulated black markets and the personal freedoms enjoyed by the vast majority of Americans. We’re urging the Texas Legislature to take action in January to let Texans play.”
The data Clay is referencing is clearly from the EKG report, which highlighted the revenue and job opportunities legal sports betting would create.
Per EKG, Texas sports betting would create:
Nearly 900 direct and almost 8,000 indirect jobs
Tax revenue over $360 million annually
Beyond revenue and jobs is a renewed emphasis on consumer protections (which is where the focus should be):
“For me, it's not really a revenue issue. It's a freedom and liberty issue," State Rep. Jeff Leach told the Austin American-Statesman (Leach proposed a constitutional amendment to legalize sports betting in 2023). "Thirty-nine states have passed some form of legalized sports betting. Our data shows that this is rampant now in the state of Texas… And all of it is unregulated. It's unsafe and extremely risky for everyone involved."
In addition to Alvarado’s bill, there is a groundswell of support for a constitutional amendment that would leave the decision up to the voters and spare lawmakers any potential blowback for their votes.
“Texas’ sports betting ban leaves some Texans vulnerable while we miss out on potential state revenue and economic growth,” is the opening line of former professional golfer Jesse Speirs’ op-ed in the Dallas Express.
Speirs goes on to say:
“Black market sportsbooks dodge U.S. regulations and offer no legal recourse for customers. Legalizing sports betting would allow the state to regulate and provide consumer protections while tamping on these fraudulent, illegal actors who are siphoning revenue that could be going to the state and benefiting taxpayers instead.”
And then there is Medina County Commissioner Larry Sitre, who writes in the San Antonio Express, “Texas’ leaders often invoke the importance of people having the freedom to make their own decisions. The decision to legalize sports betting should be left to the people,” through a constitutional amendment.
Legal and Regulatory Roundup: MS C&Ds; SC Sports Betting Bill; Bet365 in IL; NGCB Revokes Sibella’s License
Offshores ignore Mississippi: Bovada has complied with cease-and-desist letters from numerous states, but at the NCLGS Conference, Mississippi Gaming Commission (MGC) Executive Director Jay McDaniel said that offshore sites, Bovada, MyBookie, BetUS, BetWhale, and BetOnline, have ignored its C&D letters. The likely reason? The offshore do a lot of business in Mississippi since the state doesn’t have licensed online alternatives. Basically, if they are doing a lot of business in your state, they aren’t leaving.
South Carolina lawmakers prefile sports betting bill: South Carolina House Minority Leader Todd Rutherford and Rep. Heath Sessions have prefiled a bill that seeks to legalize sports betting. The bill, H 3625, seeks to pass a constitutional amendment that would authorize parimutuel wagering, sports betting, and casino activities. Rutherford also profiled a separate bill, but neither is likely to go very far, as Gov. Henry McMaster has expressed opposition to gambling expansions.
Bet365 license approved in Illinois: The Illinois Gaming Board (IGB) approved bet365’s sports betting license, setting the stage for the company to enter the sizable market with retail and mobile wagering through a partnership with Walker’s Bluff Casino.
NGCB revokes embattled gaming executive Scott Sibella’s license: The Nevada Gaming Control Board reached a settlement with Scott Sibella, the former president and COO of Resorts World Las Vegas. The settlement includes revoking his gaming license after Sibella pleaded guilty to failing to report illegal gamblers playing at MGM Grand in 2018. You may recall that Sibella was a central figure in a high-profile illegal gambling case that included bookie Matthew Boyer and MLB superstar Shohei Ohtani’s interpreter.
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News: Operators Are Taking Every Tax Increase Seriously
A proposal in Michigan (first reported in last week’s newsletter) seeks to raise the tax on online operators ever so slightly.
The commercial sports betting tax rate would increase by .1% (yes, a tenth of a percentage point), while each online casino tax bracket would increase by a whole percentage point, from 20-28% to 21-29%.
The proposal is quite modest, but operators, fresh off significant increases in Ohio (10% to 20%) and Illinois (15% to a graduated rate between 20% and 40%) this year, are not taking it lightly.
Per Robert Linnehan at Sports Betting Dime, “FanDuel, DraftKings, and BetMGM all sent similarly worded emails to Michigan users this week urging them to contact their state legislators to oppose two proposed bills that would slightly increase both the iGaming and sports betting tax rates in Michigan.”
According to SBD, the emails sent to users end with a link to a fillable form on the Sports Betting Alliance website that is sent to the user’s state lawmakers.
“I’m reaching out because raising taxes on legal sports betting and iGaming will only hurt fans like me who just want to enjoy games how we want. Senate bills 1193 and 1194 would increase the tax burden on this industry, hurting fans like me and putting hundreds of new local jobs at risk. That’s not the Michigan way. Let’s protect our freedom to enjoy the games we love without more taxes. Please let us continue enjoying the games as they are,” the form reads.
Don’t expect much during the current lame-duck session, but the effort could make a return appearance in 2025, and the state’s online gambling operators may fear that a 1% ask will turn into a 10%+ ask.
Views: MGC Requests Data on Limited Bettors
Jordan Maynard, the Chair of the Massachusetts Gaming Commission, provided some breaking news at the NLGS Conference this weekend.
According to Maynard (h/t Jessica Welman), the MGC sent Massachusetts licensees a request for data on limited bettors, including stake factor, customer lifetime value report, and whether or not customers have a VIP host.
Maynard also said that a wide range of bettors have contacted the MGC to complain about being limited. Contrary to what the sportsbooks have said, "They're not Spanky. I don't feel particularly sorry for Spanky; he's made a lot of money."
My big question is: Will the sportsbooks comply with this “request?” — This isn’t a mandate… at least not yet.
Further, if they comply, will operators send what the MGC actually wants or a simplified version of it?
Operators have played with fire once and got a little singed in the process, so it will be curious to see how closely they want to guard this information.
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Around the Watercooler
Social media conversations, rumors, and gossip.
This news is generating a lot of positive chatter around New York's online gambling efforts in 2025:
Forgive me if I don’t share that optimism. I hope Assemblyman Pretlow proves me wrong, but as I said on X, “One of these two says he is pro-online poker/casino. History says otherwise,” particularly when it matters:
Stray Thoughts
Who has been asked to testify at today’s Congressional sports betting hearing?
NCAA President Charlie Baker
Former NJ Division of Gaming Enforcement Executive Director David Rebuck
NCPG Executive Director Keith Whyte
Former NFL Player Johnson Bademosi representing the NFLPA
Harry Levant, Director of Gambling Policy and Certified Gambling Counselor, Public Health Advocacy Institute at Northeastern University School of Law