Dutton offers Texas sports activities betting a strive with new laws

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Todd Shriber

Posted: Jan 22, 2021 8:17 am.

Last update on: January 22nd, 2021, 9:08 am.

Rep. Harold Dutton Jr. (D-Houston) recently introduced a sports betting law in the Texas State House that only applies to mobile devices. The proposal limits the number of permits granted to five and provides a favorable tax rate of 6.25 percent.

Texas Sports BettingTexas State Rep. Harold Dutton Jr. He proposed a sports betting bill. (Image: Texas Tribune)

Dutton is one of the longest-serving members of the state’s House of Representatives. He suggests that the Texas Department of Licensing and Regulation oversee a system where five licenses are issued and each operator can operate up to two online brands.

House Bill 1121 (HB 1121) is very different from a separate proposal that is reportedly endorsed by some of the Lone Star State’s most famous professional athletes. A plan sponsored by Jerry Jones, owner of the Dallas Cowboys, along with Mark Cuban and Tilman Fertitta, governors of the Dallas Mavericks and Houston Rockets of the NBA, would make pro-sports franchises and pari-mutuel Allow facilities in Texas to become licensees.

This legislation would enable racecourses, greyhound tracks and sports teams, among other things, to operate online sports betting through a single skin. We estimate that 16 skins will be available, ”said Eilers & Krejcik in the latest edition of its bi-weekly EKG Line report.

Other predictions assume that 14 to 20 skins could be made available. After obtaining a skin, a team or a racetrack can work with an operator like DraftKings, FanDuel or Penn National Gaming. Each of the three above services already have investments in sports betting. Jones has a stake in DraftKings, while Cuban invests in the esports betting platform Unikrn. Fertitta’s Golden Nugget Online Gaming (GNOG), which recently went public, holds sports betting licenses in several states.

Dutton details

As is so often the case in politics, there is some good and bad news in Duttons HB 1121. The proposed tax rate of 6.25 percent is positive.

If this bill were passed and signed by Governor Greg Abbott, Texas would have one of the lowest sports betting taxes in the country. At 6.25 percent, the state would be half a percent below Iowa and Nevada and 225 basis points below New Jersey, the largest market for sports betting in the United States. The tax system proposed by Dutton is also far cheaper than the 34 percent and 51 percent, respectively, that are in place in Pennsylvania and Rhode Island.

HB 1121, on the other hand, prohibits betting on colleges in Texas. This may be significant considering that soccer is the most seeded sport in the US, the most popular sport in the Lone Star State, and there are a dozen schools in the state that play in the Football Bowl Subdivision (FBS). level.

Obstacles to the passage

With Texas being the second largest state, there is an obvious desire among operators for sports betting to come to life there. But there are many hurdles.

“Abbott is against an expansion of gambling. The legal approval thresholds are high, ”explains Eilers & Krejcik. “Las Vegas Sands is campaigning for land-based casinos to be approved – an effort that could drain political oxygen from online sports betting. The list of obstacles goes on. “

However, other reports suggest that Abbott is interested in sports betting and that Lt. Gov. Dan Patrick is who rather opposes the idea. Both are Republicans. Patrick also acts as President of the Senate, where some members are against the expansion of any kind of game on moral grounds.

The other “problem” is the strong budget position in Texas. While some states are struggling for revenue after COVID-19, the Lone Star State faces only modest deficits in the coming fiscal year, which means debating issues like cannabis, casinos, and sports betting is a luxury, not a necessity.