Dozens of people testified before the House Licensing and Administrative Procedures Committee Tuesday, with supporters saying that gaming taxes could put an additional $1 billion a year into state coffers. Lawmakers are currently grappling with a $27 billion budget shortfall in providing existing state services. Gambling proponents said this might be the best opportunity to expand gambling in Texas in a decade.
The Texas Gaming Association is backing House Joint Resolution 112, the omnibus constitutional amendment that would license eight casinos, allow slot machines at eight racetracks and allow more gaming on Indian lands. The association says its proposal could bring in $1.2 billion a year in gaming taxes and promote luxury resorts because of the limited number of licenses.
Each casino license would cost $50 million. Such a high fee would force casino operators to build extravagant resorts to make a profit, said Jack Pratt, chairman of the gaming association.
"Texas is the largest untapped gaming market in the country," he said. His organization estimates total gaming revenue under the omnibus proposal could reach $6.6 billion a year.
Tilman Fertitta, chairman, president and CEO of Landry's Inc., the company that owns the Golden Nugget casinos, said he could have a casino up and running in Galveston in a matter of weeks, if the bill passes. He would then begin work on a new facility and argued that local governments would see boosts in taxes on hotel rooms, restaurants and retail stories.
"The billion dollars in tax revenue strictly from the gaming is just a portion of what municipalities, counties and the state of Texas would get from the ripple effect and the ancillary taxes," Fertitta said.
State Rep. Jose Menendez, D-San Antonio, authored the omnibus bill and said, "We are in negotiation mode ... we want the best deal for Texas."
Developers, racetrack operators and breeders testified in favor of more gambling, insisting it would improve their businesses. But Christian and conservative groups were joined by some Indian tribes in opposing any expansion.
"I believe gambling tears down the family and promotes crime," said Pat Carlson, president of the conservative Eagle Forum. "The very people who should not gamble, do gamble."
The chairman of the Kickapoo Traditional Tribe of Texas, Juan Garza Jr., said adding more gambling in Texas would hurt his community, which depends on casino revenues to maintain their federal lands in remote South Texas.
"We would not be able to take the competition and our gaming business would be put out of business," he said. Garza asked that if Texas chooses to legalize casinos, then his tribe should be allowed to move its facility to a more populous region.
Several Indian tribes, that are not allowed to build casinos on their land, had pushed for legislation that would only allow slot machines and casinos on their land, or at existing race tracks. Other business groups asked that slot machines be allowed in bars across the state.
The chairman of the committee, state Rep. Mike Hamilton, left the bills pending and the committee staff will likely revise the proposals before lawmakers cast a vote. But committee members appeared to favor putting expanded gambling up for a vote as a constitutional amendment, rather than passing a law on their own.