New Texas Legislation Would Grant Sportsbook Licenses to Pro Teams

Posted on: February 24, 2021, 08:11h. 

Last updated on: February 24, 2021, 09:31h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Texas state Rep. Dan Huberty (R-Houston) is proposing sports betting legislation that would allow the state’s professional franchises to act as sportsboook operators.

There are other moving parts. Huberty is seeking to put the issue of sports betting before voters in November. A House Joint Resolution (H.J.R. 97) provides for an amendment to the state constitution tied to House Bill 2070 (H.B. 2070). The joint resolution is phrased as “The constitutional amendment authorizing the legislature to legalize sports wagering in this state,” and gives voters the opportunity to say “yay” or “nay” on sports wagering in the second-largest state.

“Any sports governing body can enter a commercial agreement with a sports wagering operator, under which the sports governing body may share in the amount wager or revenues derived from sports wagering on the sports governing body’s sporting events,” according to H.B. 2070.

Cowboys owner Jerry Jones and Mark Cuban, his counterpart at the Mavericks, have skin in the sports betting game. The Cowboys are part of a group that includes New York Yankees ownership that holds an equity stake in DraftKings, while Cuban is one of three NBA governors with investments in sports betting data provider Sportradar.

Long Road Ahead for Texas Sports Betting

The aforementioned bills would also allow for Texas’s greyhound and horse racing facilities to operate sportsbooks. The state’s three horse racetracks are Lone Star Park in Grand Prairie, Retama Park near San Antonio, and Sam Houston Race Park in northwest Houston.

While there’s obvious enthusiasm among gaming companies and teams to see sports wagering come to life in Texas, getting any related bills across the finish line is a different matter. For example, a joint resolution requires two-thirds of majorities in both the state House and Senate, and can’t be vetoed if that threshold is met.

Under the state’s legislative structure, the lieutenant governor carries considerable clout, meaning it’s essential for sports betting’s fortunes that H.J.R. 97 be put before voters.

While Texas leans toward the conservative side of the political spectrum, voters in such states aren’t rabidly opposed to sports wagering. Last November, related ballot initiatives easily passed in Louisiana and South Dakota.

Operator Outlook

Home to 29 million residents, 13 pro teams across seven leagues, and a slew of colleges playing FBS football and Division I basketball, Texas is an obvious “golden goose” market for gaming companies.

How the operator landscape shakes out, assuming the Huberty/Hinojosa bills are passed, is a different ball game. H.B. 2070 says an “interactive sports wagering operator shall only be permitted to hold out its sports wagering platform to the public under one brand.”

In plain English, the legislation doesn’t provide for second skins. That would be a drag for Rush Street Interactive, which earlier this week signed a second skin agreement with Penn National Gaming that includes Texas reciprocal rights. Penn has Texas market access because it manages the aforementioned Retama Park.

Given the land-based casino footprint in neighboring Louisiana of Caesars Entertainment and Golden Nugget, those operators would likely move swiftly to enter the Texas sports betting arena if it opens. The state would also draw other usual suspects, such as BetMGM, DraftKings, and FanDuel, among others.