Gambling on Gaming Coming to Texas? (Part 1)

Since I moved to the Island 13 years ago, every year I would hear talk of casinos coming to Galveston, but I really did not start paying attention to the speculations and opinions from fellow Islanders until about 5 years ago when I started my career in real estate. As each year passed, more and more clients would ask me what I knew about the controversial issue and what impact it would have on the city of Galveston. It seems that this became a popular debate and “what-if” scenario for Island property owners since 2009. After the painful year Galveston experienced in 2008 due to Hurricane Ike’s wrath as well as UTMB, one of the Island’s major sector of the economy, laying off over 3,000 employees, more and more people seemed to support the idea of expanded legalized gambling in Texas. Many people see it as the only way for Galveston to get back to the “glory days” and get back on its feet. It’s not only Galveston. And it’s not because of Ike. The state of Texas is experiencing a historic budget deficit of an estimated $11 billion (resources all cite different amounts). Texas legislators are looking at various cuts in other important government sectors, such as education, instead of slapping a higher tax bill into our laps. Within the past few years, the environment has improved for proponents of expanded legal gambling in other states which ended up adopting legalized gambling as way to overcome budget pitfalls. It seems as financial despair has had an effect on some lawmakers stance on adopting expanded gaming. So far this year, I feel like there is a story in the paper at least 3 times a week addressing the controversy and updating us Island residents on the saga that never gets resolved, and each new session, our elected officials seem to start the whole process over again! What was going on?? I recently made the decision to stop listening to everyone’s opinion, and research the facts, then come up with my own stance on the debate. I also wanted to have the information to share with clients, or have the ability to provide them with internet resources when asked “When is gambling coming??” As a Realtor, I take a lot of pride in the value I place on being ethical with my clients, so having documented facts from the state’s government website to discuss makes me a lot more comfortable. I do, however, have my own opinion as an individual and would like to share some things that I learned and read that helped me reach my position on this controversial topic.

I was quite aware of the fact that the states bordering Texas all offer gambling, especially since I am one of those Texans that looks forward to that trip across the state line to the casino to play 3-card poker, Texas Hold ‘Em, and of course, Wheel of Fortune! What I was not aware of was that 32 states have casinos, and every state other than Utah and Hawaii have some form of legal gambling. (Although while doing my research, I did see an article published last week that Hawaii may be changing their minds on this as well.) Americans, especially Texans, are ready to play. Money spent (lost) by Americans has more than doubled since 1995, growing from $16 billion to $33 billion in 2010. Tax revenues projections brought in by expanded legalized gambling in Texas reach as high as $4.5 billion. There is also a push for electronic gaming and slot machines to be added to state racetracks. Reports have estimated that by adding these gaming devices could produce up to an additional $1 billion revenue for the state.

It is starting to look like gambling’s best bet may be the support from the House of Representatives if the issue can make it to a public vote. Rep. Craig Eiland (D) Galveston, Sen. Rodney Ellis (Houston), and Rep. Jose Mendez (D) San Antonio, presented a joint resolution to the House supporting expanding legalized gambling. (HJR 112) The main call to action within this joint resolution proposes creating a constitutional amendment that would allow the creation of the Texas Gaming Commission. This commission would be responsible for authorizing and regulating slot machines and casino table games. This resolution would also create the Texas casino and slot gaming fund into which all revenue collected by the state due to expanded gambling would be deposited. The governor would also be required to appoint the members of the Texas Gaming Commission by January 1, 2012. Individuals that would serve on this commission will be asked to adopt the rules necessary to be in the position to begin running casinos and slot machine establishments by March 1, 2012. Apparently up to 6-7 casino gaming licenses could be issued to “destination areas” within Texas, and up to 2 more casino licenses could be issued to development projects on Gulf Islands who meet the requirement of having had at least 1,000 guest rooms for visitors as of January 1^st of this year. (Hmm…wonder where they could be talking about?)

Tomorrow...part 2: More Money, More Problems?

References:

1. San Angelo Standard Times “Gambling: The Real Deal or the Devil?” Kiah Collier April 22, 2011

2. www.parade.com 2007 edition = May 20, 2007 “Is Gambling Good for America?”

3. www.texastribune.org “In Texas, Gambling’s Odds Have Improved” February 25, 2011 Ross Ramsey

4. Fiscal Notes, 82^nd Legislative Regular Session – HJR 112 March 28, 2011