4th of March 2009 Author: Glo Wood
In the legislature and in the courts - it's all happening in the Lone Star State
It looks as if 2009 will be a busy year for the legislature and the courts in the state of Texas as moves to expand or liberalise gambling shape up. Starting the year off is the reintroduction by Representative Jose Menendez of HR 222, a bill which seeks to acknowledge poker as a game of skill rather than chance, therefore liberalising its pursuit.
In 2007, the Texas legislature tried and ultimately failed to pass a bill legalising poker in Texas and Rep. Menendez has accordingly introduced a new bill, HB 222 "The Poker Gaming Act of 2009", for the upcoming session. Full details on the bill can be found at http://www.legis.state.tx.us/tlodocs...l/HB00222I.htm, but it is intended that taxes raised will be dedicated to assisting the homeless in the state.
There are set limits on tournament buy-ins at $100, and restrictions on rake confining it to 10 percent and a maximum of $4 a hand, although operators can levy an additional $1 a hand to fund bonuses, jackpots and promotional activity. There are stiff regulatory proposals.
Turning to the courts rather than the legislature itself is an initiative by a Dallas-based lawyer who has filed civil suit naming the state and the city of Dallas in an attempt to secure a declaratory judgement.
Citing "uncertainty and insecurity with respect to rights, status and other legal relations" regarding live poker, and the deleterious effects of such uncertainty on his Pick-Up Poker business, lawyer David Tucker is hoping for a ruling that will enable him to move forward with more assurance.
Tucker's concept is to lease fully furnished and equipped poker rooms to private individuals and parties. And he's betting on the way the venture is structured to get things moving and legally acceptable. Players make deposits with the firm and are given chips with which to play in "cashless" competitions. When they are done, players can get refunds on their chips.
Taking a wider view, Business Week reports that for the second time in recent years, a serious drive is afoot in the Texas Legislature to legalise [land] casino wagering - a move that, if successful, would mean trouble for neighbouring Louisiana riverboats and race track casinos that have cashed in on Texas gamblers since the 'nineties.
Texas lawmakers have proposed the establishment of up to 12 casinos with retail, meeting and entertainment infrastructures. The measure also would allow slot machines and horse and dog racing tracks in Texas, along with casino gambling on Indian reservations.
For Louisiana such a competitive scheme could be disastrous - 70 percent of the state's business comes from the Lone Star State.
Business Week reports that big tax revenue projections made by supporters of the proposals border on the ludicrous, along with the appeal of new jobs in a recession.
Texas backers estimated that 12 state-licensed casinos would pull in $3 billion to $4.5 billion per year in state and local tax money.
"That's an impressive figure - provided it would ever pan out," opines Business Week. "According to the American Gaming Association, casinos in the 12 states where they are legal, pulled in $5.8 billion in taxes - with $3.7 billion of that coming from five states: Nevada, New Jersey, Louisiana, Indiana and Illinois."
That opinion is backed by at least one gambling expert, who noted: "They are really deluding themselves about the revenue projections. Three to 4.5 billion a year? That's just a fantasy. Texas is an intriguing state but I don't see them neutralizing the entire gaming industry nationwide."
There may be problems raising the necessary capital for such ambitious projects in the currently depressed credit markets. As Business Week points out: "Although the recession might increase the appeal of legalising casinos in Texas, the downturn also is making it difficult for the industry. In some states - excluding Louisiana thus far - revenue is declining. Nationwide, though, it's the lockdown of the credit markets -- and the virtual lockout of the casino business.
"At least three major casino building projects have been halted in Las Vegas, representing about $33.5 billion, while $11.6 billion in projects outside of Las Vegas have been put on hold. The New Jersey casino group once owned by Donald Trump is in bankruptcy protection for a third time, buried in debt.
"Last month, Pinnacle Entertainment Inc., which says it's bullish on Louisiana, won delays from the Louisiana Gaming Control Board on development schedules for riverboat casino-hotels in Lake Charles and Baton Rouge. Pinnacle officials said that even if they could find credit, it likely would cost the company 15 percent to 18 percent in interest."
Finally there's the determined opposition of religious right groups that have strong influence in the state of Texas. Tough opposition has been promised by Baptists and social conservatives, who killed an earlier move toward casinos. And Governor Rick Perry seems cool to the idea, which would have to be approved by a public vote on a constitutional amendment, with splits already emerging between casino and race track interests.
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