Texans Against Gambling
Legislative Issues
At least four major pro-gambling proposals are expected to surface in the Texas Legislature in 2009:
Privatization of the lottery & expansion of gambling in Texas
Making off-track betting and Internet wagering legal in Texas
Legalizing Video Lottery Machines (VLTs) (aka slot machines), to operate at Texas race tracks
Legalizing Electronic Bingo (Indian casinos, Bingo halls)
Marketing gambling to minors
Backers are using the same "bait and switch" arguments that brought the lottery to Texas, that billions more will be added to state coffers through gambling revenues and economic development. Remember when the lottery was going to "save" education in Texas? Lottery revenues account for a tiny fraction of education expense in Texas. Race track revenues have never materialized as promised when first proposed in 1987. Tracks have remained in chronic financial trouble and have sought numerous state bailouts. The experience of other states shows the same. Meanwhile, the negative consequences of gambling continue to go unmentioned by gambling promoters:
Increases in addiction
Increases in crime
Increases in bankruptcy
Decreases in local economic and business health
Lottery Privatization
Over the past several years, cash-trapped states around the country have been approached with the idea of privatizing their lotteries. The idea is that a private company will pay a particular State up front for a license to operate the lottery for a set number of years. The company will operate the lottery during that period and recoup their investment and an acceptable return on its investment. Unlike most states though, the Texas Lottery is already privatized; the lottery operator, GTECH, performs over 95% of the services.
Unfortunately, proposals from proponents of this "privatization" initiative in Texas, have advocated for the expansion of gambling in our state in the form of constitutionally prohibited games like Keno, VLTs, and other casino style games. In addition, they have recommended the expansion of the current lottery games to the Internet and other wireless devices.
They argue they can more aggressively market the lottery, attracting a slew of new customers who don't normally gamble, and raise the state a lot more money. They are dangling the carrots of a big up-front payment and stable, predictable revenues. The companies that are heavily promoting privatization are the same ones that pushed sub-prime mortgages as "good for America." They include scandal-ridden UBS, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley.
Video Lottery Terminals (VLTs) at Horse and Dog Racetracks
We expect to see another effort by horse and dog track interests to legalize video lottery terminals in some form in Texas. Commonly referred to as "VLTs", they operate like "Las Vegas" style slot machine, and have come to be known as the "crack cocaine" of gambling. Like "Las Vegas" slot machines that account for over 90% of revenue in a typical casino, these gambling devices are known to be extremely addictive and rely on players' impulsive and habitual play. Any legislation to introduce VLTs in Texas will require a constitutional amendment.
The Texas horse and dog-racing industries, long beset by financial problems, pushed aggressively starting in 2004, for a bill to allow them operate as many as 40,000 Las Vegas-style video slot machines. We expect them to continue.
According to the Indian Gaming Regulatory Act, VLTs are considered Class III gaming. As such, any introduction of VLTs in Texas would automatically allow recognized Indian tribes in Texas to open and operate Indian Casinos. In addition, Indian tribes with a historical presence in Texas would be free to seek federal recognition in Texas, and, if successful, open casinos as well. The State of California now has over 50 Indian Casinos.
Off-track Betting and Internet Wagering on Horse and Dog Racetracks
Due to Texas horse and dog-racing industries failure to pass VLT legislation, we now expect them to push for the ability to offer off-track betting and Internet wagering on horse and dog races nationwide. Legislation to authorize off-track betting would allow the public to place wagers at off-track betting parlors, where citizens can watch televised races in a sports-bar setting. This proposal would increase the footprint of gambling in the State by allowing these facilities to be located anywhere in the State.
Internet Wagering would allow bettors in Texas to put money into online accounts from which they could draw to place bets on races nationwide. During a June 2008 legislative hearing, it was revealed that Magna Entertainment Corp., the parent company of Lone Star Park in Fort Worth, is pushing for this type of gambling expansion in Texas. This is a Canadian company that runs nine racetracks in the U.S. The inability to provide reasonable identity and age verification for individuals opening an account and placing wagers is just one reason why Internet gambling is a bad idea for Texas. Identity theft is a huge problem facing our society, and the last thing needed is another forum for this type of activity to occur.