This really is all about the money.
Texas lawmakers have been talking about various forms of legalized gambling for decades, and the only times they've allowed new forms — first bingo, then pari-mutuel wagering on dogs and horses, then the lottery — have been times of financial peril for the state.
They'll start the latest round officially with hearings in Austin this morning before the House Committee on Licensing and Regulation. Legislation won't be filed until after the November elections, but the field of play is clear: Gaming interests inside and outside Texas want lawmakers to expand legal gambling to include either slot machines at race tracks, resort casinos or some combination.
It's always a contentious subject, and state Rep. Edmund Kuempel, R-Seguin, has a strategy for today's hearing: "Let 'em vent. Just let them talk. Pros, cons, in-betweens, fors and againsts, independents … just bring it on."
The subject matter hasn't changed in the last two or three legislative seasons, but the financial environment is different now. State budgeteers estimate they'll have up to $18 billion less than they need for current programs when they put the next budget together, and they need some mix of spending cuts, revenue increases and trickery to make the books balance. In a state where tax increases are often treated as a form of political sacrilege, gaming seems to be a relatively painless way to raise money. And the people pushing gaming this year are telling lawmakers that new wagering could raise $1 billion or more every year. That doesn't cover the hole, but it's not chicken feed.
Texas is surrounded by gambling. New Mexico, Oklahoma and Louisiana all have racetrack casinos, according to the American Gaming Association. And TXP — an Austin-based economics consultancy hired by Win for Texas, the track owners' group — estimates Texans wagered $2.7 billion in 2009 in the region that includes those three states along with Nevada, Mississippi, Arizona and Colorado. They go on to predict that $2.2 billion of that would stay here with slots at tracks and that the total amount gambled would reach $3.9 billion by 2013. When TXP pulled in numbers from estimated economic impact and so on, it came up with an expected annual take for the state if slots were allowed at tracks: just under $1 billion. It also estimates that allowing slot machines at racetracks and on the state's three Indian reservations would create more than 77,500 jobs.
"Texans are spending billions of dollars — we're just not keeping it in Texas," says Mike Lavigne, a spokesman for Win for Texas. The arguments are somewhat familiar, he admits, but more data is available to decision-makers, especially on the shift in competition. "We're no longer in competition with Las Vegas, but against Louisiana and Oklahoma," he says.
Kuempel says the comptroller — who'll start the legislative session by telling lawmakers how much money she thinks the state will have to spend in its next budget — will write the script for the debate. Gambling isn't acceptable to some lawmakers, except in the face of other less tasteful alternatives.
The proposals for casinos, racinos, slot machines and other hybrids are not new, and the general arguments for each are familiar to policymakers who've been around for a while. Today's hearing will a primer for the new kids in the Legislature and for Texans engaged in the issue for the first time. And, of course, the talk will circle back often to money: What does Texas have to gain by letting its citizens lose at tables and slots closer to home?
The Win for Texas group — which includes current racetrack owners who'd like to add slot machines and other games to their facilities — is touting that updated study on the "Economic and Tax Revenue Impact of Slot Machines at Racetracks in Texas." The Texas Gaming Association — those are the folks who want to legalize and build resort casinos around the state — will update its economic studies and polling closer to the legislative session, according to Chris Shields, the group's chief lobbyist. Its previous work has promised larger revenue numbers for both the state government and for the economy. And the rivalry between the various gaming factions has been the secret weapon of gambling opponents. Casinos versus tracks has been a losing proposition in recent sessions.
"It's different this year because of the situation with the budget," Shields says. "What hasn't changed, but I think will change, is the willingness of the gaming interests to work together. I don't think there's any way for a bill to pass without that — and everybody wants a bill to pass."