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House State Affairs met on March 22 to take up a number of bills. This report covers the following bills: HB 1942 (Leach), HJR 102 (Leach), HB 96 (González, Mary), HB 712 (Shaheen), HB 2060 (Capriglione), HJR 155 (Geren), HB 2843 (Kuempel), HB 3033 (Landgraf), HB 2374 (Landgraf | et al.), HB 1443 (Slawson), HB 2663 (Tepper), HB 2664 (Tepper), HB 2206 (Patterson), HB 613 (Vasut), HB 904 (Moody), HB 2142 (Guillen), HB 2609 (Guillen), HB 3013 (Slawson), and HB 2713 (Dean). An archive of this hearing can be found here.

 

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Comments

  • Chair Hunter – Due to the amount of those registered to testify, will give people 3 minutes

 

HB 1942 (Leach) Relating to the regulation of sports wagering; requiring occupational permits; authorizing fees; imposing a tax; decriminalizing wagering on certain sports events; creating criminal offenses; providing administrative penalties

  • Leach – Fans illegally betting on sports events has gone back decades; $7b in sports wagers are done criminally/illegally
  • This bill and HJR implements smart/safe/efficient oversight on sports betting
  • Will set up a framework that promotes transparency
  • New revenue stream, have opportunity to address problem gaming, lower property taxes (98% of revenue will go to this)
  • Strict and detailed regulation will go through the Lottery; background checks, etc.
  • Creates a mobile permit tied to major sports teams’ franchises; would have to stick to struct r
  • $500k initial permit fee and 10% tax rate of SB operators
  • NFL, NBA, baseball, soccer, PGA and certain racing events; includes WNBA unlike other bills
  • Assesses civil/criminal penalties
  • Are protections for minors and for those who struggle with gaming addition
  • Age limits, advertising restrictions, self-exclusion program, etc.
  • Version of bill today does not include any brick-and-mortar betting components; will stay that way
  • Bill does not allow youth or high school sports betting
  • If bill passes, will join 35 other states D.C. and Puerto Rico who already do so
  • Bill will support charitable efforts; Texas voters should have the right to choose which is in the HJR that will be laid out later
  • Smithee – Who can apply for a sports wagering permit? Limited to one professional sports franchises or designee?
    • Correct
  • Smithee – How many sports franchises?
    • 14 or 15; includes Cowboys, Texans, Rockets, Spurs, Rangers
    • Are three soccer teams FC Dallas, Austin FC; 5 PGA tour events
  • Smithee – Cannot apply for a permit if you do not own a sports team?
    • Correct
  • Smithee – Sports wagering operator is who?
    • Draft Kings, FanDuel, etc. would be the operator of the mobile sports book
  • Smithee – Any limitation who can be a designee?
    • No, franchises can contract directly with sports betting operators out there
  • Smithee – Prohibition on designee paying franchise to be a designee?
    • Not specifically; contracts are between franchises and mobile operators
    • Will work to clear up any issues in this area
  • Smithee – Application fee $500k, why?
    • In the middle of what other states offer, is on the low end; will negotiate with other members if we need to raise that fee
  • Smithee – Have a fiduciary obligation to maximize revenue to the state; want to get the full market value of what that fee would cost
  • Smithee – Flexibility on the tax rate?
    • Willing to have conversations on both the tax rate and licensing fee
  • Smithee – Reason for limiting to sports franchises?
    • Are uniquely situated/invested in communities and state’s economy; has been done in other states
  • Smithee – Notes sports teams can leave the state; what happens then?
    • Would lose their license; do not see any of these franchises leaving the state in the foreseeable future
  • Smithee – Language on tax rate based on adjusted gross gaming revenue; do not see the “adjusted” gross revenue used in other states
    • Not a term I came up with; used in other states and used in the drafting of the bill

 

Giles Kibbe, Houston Astros and PGA Tour – For

  • Research indicates $7b in illegal sports betting in Texas each year
  • 36 other states have legalized sports betting
  • Will be an industry that continues to grow
  • Strongly support bill as it provides safeguards and regulatory certainty

 

Scott Ward, Sports Betting Alliance – For

  • Include Fan Duel, Draft Kings, and other nationally recognized operators
  • Are safe and regulated sports betting options in states that have already legalized sports betting
  • Is enormous demand for legal/safe betting in the state
  • GeoComply blocks attempts for a legal bet; 2.85m attempts were blocked in the state last year
  • Last weekend during March Madness blocked 73k attempts to make a legal sports bet

 

Bobby Perez, San Antonio Spurs – For

  • Support bill as it protects Texans, generates new revenue source, provides teams an opportunity to compete fairly across the nation
  • Are other teams who already have legalized sports betting; would give opportunity to attract more talent back to Texas
  • Proposed guardrails will give state protection mechanisms

 

Brad Reynolds, Comptroller’s Office – Resource

  • Smithee – Comptroller’s office or other agency studied the value of this and casino gambling?
    • Correct
  • Smithee – Tax rate? Gross gaming revenue or adjusted?
    • Looked at other states and the 10% is not out of line
    • Every state permits deductions

 

Christopher Grove, Eilers and Krejcik Gaming – For

  • Have testified in over a dozen states on this issue
  • Texans are illegally wagering $6.2b per year
  • Mature online sports betting market would generate $2.37b in gross gaming revenue
    • Results in $180m in direct annual tax revenue to state
  • Legal sports betting has the opportunity to create hundreds of direct jobs and thousands of indirect jobs
  • Geren – Have heard a lot of numbers that are different than what you said today
    • Is based on the experience on other states and based on Texas’ specifics
  • Spiller – What protections/safeguards to prevent minors from participating?
    • Have a number of authorizations/procedures when creating an account
  • Spiller – Any instances in other states where minors have been able to access system anyway?
    • Not aware of any wide-spread abuse

 

Jason Cohen, Dallas Cowboys – For

  • Clarifies Dallas Cowboys are not leaving the state
  • Many of our neighbors have legalized sports betting and 58% of the adult population in the nation have access to legal sports betting
  • Bill would provide safe/responsible avenue to place wagers
  • Texans are already making bets through illegal sports bookies and offshore platforms
  • Bill has best provisions from other states’ legislation
  • Need to give Texans the chance to vote on this themselves

 

Eric Shippers, PENN Entertainment – For

  • North America’s largest wagering organization; operate 20 barstool sports books across the country
  • Americans spend $63.5b in illegal bets; $6b in this state
  • Could provide a jump-start to the state’s struggling racetracks
  • Voters should decide if Texas should be the next state to authorize legal sports betting

 

Jonathan Covey, Texas Values – Against

  • Are a faith/family organization and any expansion of gambling is opposed by our organization
  • Is an overwhelming amount of evidence of negative impacts of gambling
  • After sports betting was legalized in Illinois they experienced a huge jump in those seeking help for sports betting problems, mounting loans and increasing debt

 

Cindy Asmussen, Southern Baptist of Texas Convention – Against

  • Organization has passed multiple resolutions against expansion of betting
  • Consequences of legalization of sports betting are vast in terms of debt and addiction
  • It also harms the way children view sports as a whole

 

Evan Kirkham, Self and Outlier – For

  • Outlier is a sports betting research tool; talent and investment dollars for sports betting are leaving the state
  • Bill would be good for the economy and small/big businesses

 

Cindi Castilla, Texas Eagle Forum, and Self – Against

  • Organization stands for traditional family values
  • Those coming to speak for this are not citizens of Texas, are those who will make money on this
  • Concerned about the fixing of games

 

Rob Koehler, Christian Life Commission – Against

  • Advocates make you believe there is already gambling happening in the state; no doubt this is an expansion of gambling
  • Texas Lottery Commission are allowing offshore sports wagering companies to sell online
  • Concerned how this would affect the native tribes in the state including the Kickapoo and Coushatta and Tiwa
  • Spiller – Define sports wagering as Class 3? Ultimate effect to these tribes?
    • Yes; most powerful group in this discussion is the Kickapoo
    • Are potential unintended consequences due to pending IGRA matters
  • Thompson and Koehler discuss how the bill does not include IGRA classified tribes
  • Thompson – Think the Coushatta and others should be included in this bill
    • Concerned this could become a federal issue

 

Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Bill excludes tribe from offering such games; have a right to do, but no IGRA language in the bill
  • Need specific agreement language in the bill; request an amendment be added to the bill
  • Would be unfair and would affect ability to raise necessary revenue for tribe’s members
  • Raymond – Have you visited with the bill author on this language?
    • We did and have shared the language; hopeful it is included in the bill
  • Raymond – Notes Morales would likely offer an amendment like this on the floor
    • Will continue to talk to bill author and our representative

 

Russ Coleman, Texans Against Gambling – Against

  • Agree with Koehler’s comments on IGRA
  • Bill will result in the loss of state/local control on processes and will result in the increase of gambling addictions
  • States who recently passed sports wagering bills are seeing these negative ramifications
  • This is without a doubt an expansion of sports wagering

 

Arturo McDowell, Self – For

  • Support the bill
  • Have seen the economic benefits of sports betting in other states; fantasy football alone brings in $7b nationwide

 

Leach, in closing

  • Leach closes on the bill – bill is timely and necessary; is not prefect and subject to change, but is the avenue to get where we want to go

 

HB 1942 left pending

 

HJR 102 (Leach) Proposing a constitutional amendment authorizing the legislature to legalize wagering in this state on certain sporting events

  • Leach – Is the resolution for the enabling legislation of HB 1942; if passed by 2/3 of House and Senate, voters will have the choice
  • Raymond – How many states have legalized this?
    • 35 states plus D.C. and Puerto Rico
  • Raymond – Need an HJR for this?
    • Believe it is; constitution prohibits it currently

 

Mary Smith, Concerned Women for America – Against

  • Bill will result in an increase in gambling problems which hurts entire families
  • Estimated cost to employers for gambling-related absences is $45m

 

Jonathan Covey, Texas Values – Against

  • Opposed to this bill based on public health and morality issues

 

Cindi Castilla, Texas Eagle Forum and Self – Against

  • This does not belong in the constitution
  • Colorado gambling lobby out spent 1.7k times the average citizen to get this passe
  • Lobbyists spent $50m Ohio and $40m Maryland to get this passed

 

Xingang Chang, Self – Against

  • Expanding sports gambling will make families suffer; only operators will benefit

 

Cindy Asmussen, Southern Baptist of Texas Convention – Against

  • Cannot legalize things just because of the tax revenue it will generate
  • Risk for gambling addition overall has grown concentrated on young males
  • After Virginia passed sports betting they had to pass the first state law to have additional curriculum to teach students on gambling

 

Rob Koehler, Christian Life Commission – Against

  • Against the bill; will not repeat previous remarks

 

Jerry, TD Entertainment – For

  • Houston Rockets support this legislation

 

Scott Ward, Sports Betting Alliance – For

  • Citizens of Texans should be able to vote on this; support resolution

 

Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Testimony from HB 1942 also applies to this bill
  • Put forth amendment that would spell out a legislative compact agreement with the Kickapoo
  • Kickapoo needs these funds as there are continued community needs and to be an economic engine for the region

 

Eric Shippers, PENN Entertainment – For

  • Support the resolution, no further comments

 

Leach, in closing

  • Look forward to working with members on amendments to this bill; including Smithee’s tax rate, Geren, and Kickapoo amendments
  • Turner – Have questions on the tax rates as well, will get with you later

 

HJR 102 left pending

 

HB 96 (González, Mary) Relating to the confidentiality of certain home address information in ad valorem tax appraisal records

  • Allows customs/border patrol agents to be confidential; do not want them to become targets
  • Hope approval to local and consent
  • Raymond – Thanks for the bill; would be interested in being a joint author

 

HB 96 left pending

 

HB 712 (Shaheen) Relating to state agency and local government security incident procedures

  • Shaheen – Have a CS; requires local government entities to report cybersecurity attacks to DIR within 48 hours; expands security incidents to include ransomware

 

HB 712 left pending

 

HB 2060 (Capriglione) Relating to the creation of the artificial intelligence advisory council

  • Capriglione – Have a CS; would evaluate AI products/services used by state agencies
  • Need to acknowledge AI can have inherent biases, but is an increasingly important tool
  • Need to ensure they are designed and used ethically
  • Bill requires detailed reports to be submitted by the agency to the council
  • Thompson – Would like to visit with you on this bill

 

HB 2060 left pending

 

HJR 155 (Geren) Proposing a constitutional amendment to foster economic development and job growth, provide tax relief and funding for education and public safety programs, support the horse racing industry, and reform horse racing and greyhound racing by authorizing casino gaming at destination resorts, creating the Texas Gaming Commission, authorizing sports wagering, requiring a license to conduct casino gaming, requiring the imposition of casino gaming and sports wagering taxes, requiring license application fees, and authorizing Tribal-State compacts related to gaming.

  • Geren – Have a CS; filed this bill to let constituents to allow destination resort gambling
  • Need more gambling oversight through the creation of the Texas Gaming Commission
  • Louisiana officials note Texans make up 85% of the business in Lake Charles
  • This will guarantee billions of investment dollars and would keep Texas tourism dollars at home and bring tourism dollars into the state
    • Estimated this could bring in $10.5b
  • Would have a 15% tax on gross; could create a new fund for those who are not under the PUF
  • Bill has been blocked before, this resolution is the pathway we have decided to go down
  • Have a lid on number of licenses; all applicants will go through a rigorous process
  • CS envisions open bid $1b minimum investment; only in counties who voted yes on this resolution
  • Have amenity requirements and would ensure these resorts had a limited footprint
  • Overviews CS changes in definitions including “casinos” to mean licensed casino gaming facilities within a resort; no license holder can hold more than two licenses at a time
  • Smithee – Looks like this and Leach’s are incompatible
    • Not sure if we could adopt both; under mine the legislature could provide a type of wagering
  • Smithee – Your type would include sports wagering on-sight? Asks about taxation
  • Smithee – People deserve the right to decide this, but not comfortable about the terms we are/are not going to have gambling on
  • Smithee – Propose a constitutional amendment to legalize then start two years later
    • Correct, but legislature could provide mobile if they wish
    • Resort destinations would be several years in construction; are proposing 15% gross tax
    • Have taken some of the Indian’s tribes concerns in our bill
  • Smithee – Why not open all licenses up to bidding to maximize revenue?
    • Are not putting a value on licenses to speed the process up; can have a designee

 

  • Smithee – Will probably oppose any gambling measure, but if we do this want to make sure it is right for the state; resolution goes into explicit detail on some aspects of casino gambling and not others; need to look at how much room we have to further regulate these detailed areas
    • Some are in the Constitution already
  • Smithee – They are; my issue is on those things where it doesn’t say one or the other
  • Smithee – Other thing I had a problem with is the ballot language, sounds like an informercial for gaming, would like to see something a little more objective; will visit with you after
  • Raymond – Do you know if contemplate, for example in Corpus Christi, whether they could have an offshore vessel in the interim?
    • No
  • Raymond – So they might be able to?
    • Need to have money spent and building built
  • Raymond – Would you be open to including HD 32 in the Corpus Christi area?
    • Left out intentionally
  • Raymond – On Line 3 & 4, DFW statistical area, does this include Lubbock?
    • No

 

Chris Hughes, Las Vegas Sands – For

  • Worked closely with Rep. Geren and Rep. Kuempel, in support of bills
  • Tried to craft casino gaming bill with minimum footprint and maximum economic impact, uses existing racehorse licenses to get program up sooner rather than later
  • Majority of revenue at these resorts is nongaming
  • Assigns racing licenses to specific metropolitan areas with ability to apply for license but no guarantee
  • Requires minimum investment, no one can own equity interest in more than 2, prohibits tax money use, authorizes sports wagering in place & manner prescribed by legislature, increases racing purses, 15% tax on gross revenue
  • Directs Gov to negotiate in good faith for gaming on tribal lands, includes appropriations to help fund Gaming Commission
  • Intended as a compromise between stakeholders with implementation timeline that maximizes investment, job creation, etc.
  • Smithee – Las Vegas Sands is not a racetrack owner, your interest would be as a designee of one of those race track owners?
    • Yes, have an internal member of Las Vegas Sands who could answer better
    • Anticipate an opportunity to negotiate with other entities to apply for the application
  • Smithee – So you would gain their opportunity? Assume you would pay money
    • Correct, bilateral transaction
  • Smithee – Would that money belong to the racetrack owner or Texas?
    • Bill doesn’t contemplate, but would assume racetrack association
  • Turner – On the geographic areas defined in the bill, is this Census Bureau definitions?
    • Yes, contemplates a date so we know when that is; DFW area is 12 counties
  • Turner – Likely the 2 casinos would be in Dallas or Tarrant, but conceivably in Denton, Collin, etc.
    • Certainly could
  • Turner – On those eligible to hold a license, apart from at large license, pretty prescriptive on who can hold, correct?
    • It is, part of compromise and also wanted to speed up process; open bid could add another 18 to 36 months
  • Turner – How many total licenses?
    • 8 statewide, in Constitution to ensure limited footprint
  • Turner – For the 7 not at large, are their more than 7 potential license holders?
    • More than 7, some of those with racetrack association licenses won’t be able to utilize for a casino, several operators who could use these
  • Turner – You’re talking about casino owners coming in to buy licenses, but before that happens, are there more than 7 racing licenses
    • 3 currently
  • Turner – So 3 entities would be eligible at the onset to apply for the 7 licenses?
    • Wouldn’t be able to apply for all 7, but could designate someone else to apply
  • Turner – And that would presumably be a sale, private business transaction?
    • Private business transactions
  • Turner – What would the license be worth?
    • Don’t know that at all, no estimate
  • Turner – Fair market value of license to build a $2b casino?
    • Doesn’t exist in Texas, don’t participate in gaming market in other states so no knowledge
  • Turner – Want to understand value if we’re going to do this
    • Part of the value is recognizing minimum investment requirements, large operators could be investing up to $5b
    • Hard to understand how big these are until you see one
  • Turner – 15% tax is on gross gaming revenue, so revenue from lodging, food, alcohol, not subject?
    • Right, still subject to other taxes, but the 15% is specifically on gaming revenue
  • Turner – So 70% of the total economic impact is non-gaming?
    • 70% of total revenue; has been as high as 70% nongaming
  • Turner – So 70% will not be subject to gaming tax?
    • So long as it’s not gaming-related
    • Estimates for gaming revenue roughly $9b gross revenue, so $1.35b/year gaming tax revenue
  • Turner – Have read about this in other states, might be more of an issue with online sports betting; in sports betting you can get a free bet, in casinos they have a no deposit free bet
    • Can’t speak to that, defers to others who work in operations of casino
  • Turner – Heard some testimony on the other bill related to the Kickapoo Tribe and their role in this, they have concerns that as a federally recognized tribe they are not taken care of in the bill
    • On the previous bill they were concerned that nothing contemplated the Tribal-State Compacts, this resolution does, also references federal law
    • Our belief that if this passes tribes will be able to negotiate a compact; can’t speak to if it’s adequate for the Kickapoo Tribe
  • Metcalf – Consensus language from stakeholders?
    • Yes, primarily stakeholders who have been involved
  • Metcalf – Who are they?
    • Those in the Destination Resort Coalition include Chickasaw Nation, Landry’s, Sands, LaMantia family
  • S Thompson – Tribes are included?
    • In this JR it contemplates Tribal-State Compact to conduct Class 3 Indian Gaming
    • Federal courts will have jurisdiction over those compacts
  • Raymond – On the tribes, where could you see they end up, anywhere?
    • On their lands
  • Raymond – More than 100 miles away?
    • No, Indian Lands is defined under federal law
    • Could negotiate a Tribal-State Compact for gaming on those lands

 

Eric Schippers, PENN Entertainment – For

  • Operate Sam Houston race Park, Retama, hold licenses for others
  • Using existing racetracks would be fastest and most efficient way to close the gap on tax collection for gaming
  • Supported constitutional amendment in Ohio that allowed casino development; casinos generate revenue and jobs for their states, all ag providers for the racing industry will also see direct benefit

 

Gerry Del Prete, Fertitta Entertainment – For

  • Provides overview of Landry’s and Fertitta Entertainment, incl. Restaurants, hotels, casinos in other states; headquarters in Houston, 139 full service locations in Texas, operating in 50 cities
  • Have consistently been in support of destination resort casinos, not just about gaming, incl. hotels, convention space, spas, etc.
  • At Vegas property over 50% of revenue comes from nongaming sources
  • Polling shows strong support for destination resort casinos
  • S Thompson – You have people going from Texas to your Louisiana locations; what will happen to your Louisiana locations if people go to places in Texas
    • Will go down, Louisiana isn’t happy about it, but will be a greater upside in Texas
  • S Thompson – What is the life of productivity of strong revenue stream?
    • Seems to be evolving, seeing continual growth in nongaming, seeing profit center continue to grow in those areas
  • S Thompson – So gaming will wane
    • Not necessarily wanes, others grow more
  • S Thompson – How much revenue
    • In Lake Charles was $50m
  • S Thompson – Not much money
    • Just one casino, and not in a metropolitan location
  • Turner – On the 15% tax rate, in Louisiana for land-based the tax is >20% or a flat fee plus other payments top local govs; in other states do local govs have ability to assess a tax on gaming revenue
    • Some do, in Louisiana they can; with local at 25.5%
  • Turner – With a 25% tax in Louisiana and a 15% in Texas, are we coming in too low? Should we be higher and still be an appealing business proposition?
    • Las Vegas is just over 7%
    • When you add the caveat of building a $2b casino, needs to be a return on investment; $2b is a very low number with current costs
    • Did not have this obligation in Louisiana, also a limited license market
    • If you’re going to maximize revenue opportunities of selling licenses, can’t be unlimited
  • Turner – Agree you can’t be unlimited, asking if tax changed from 15% to 20% would people still want licenses
    • Not a showstopper
  • Smithee – Rep. Turner asked what fair market value of limited license would be, do you have an opinion?
    • I wouldn’t; would say you should recognize the investment to build one of these
  • Smithee – We’ve had two witnesses in the gaming industry, we’re not in the industry, if you don’t know, how can we know? Concerned that we put a $2m fee and then racetrack owner sells for $10m; have been remiss in allowing race track owner to pocket fee
  • Smithee – How can we know what the value is?
    • Need to look at other states, haven’t seen a minimum investment criterion before, assume with no investment criteria you could sell for a lot more; also getting tax revenue
  • Smithee – Once we authorize the permits, people in the secondary selling market will be sophisticated and understand the fair market value of the license; this is what legislature lacks, concerned about what value we put on the license
    • Experts out there could help you get there
  • Dean – Louisiana’s sales tax rate is what?
    • 10%
  • Dean – Ours is 8.25%, does Louisiana charge a property tax?
    • They do
  • Dean – Small property tax and small state tax; low direct taxes is probably why they have a higher number on gaming proceeds
  • Dean – A lot of your square footage is actually used for entertainment and conferences, small portion is used for gaming; majority of people in Vegas are from Texas
  • Dean – Once we get details, things we can do to make sure licenses sold go through a process to make sure someone isn’t ripping off the state
    • Would think you have ultimate approval from the Gaming Commission, can’t just sell a license
  • Dean – Think that’s important given what happened in Louisiana and getting greedy on selling licenses

 

JT Foley, Las Vegas Sands – For

  • Asking you to give constituents the opportunity to vote, polls indicate Texans are comfortable with gaming in destination resorts
  • Want all legislators to be comfortable with the bill, one of the reasons for the large lobby team
  • Texas is one of the last big markets for destination gaming
  • Discusses history of Las Vegas Sands & development of destination resorts
  • 85% of Texans want to vote on this issue this fall
  • S Thompson – You’ve been around for some time, were here several years ago; you’re saying you believe our constituents are ready for this?
    • Correct
  • S Thompson – And you’re willing to spend the money to make this happen?
    • Yes
  • Turner – Las Vegas Sands does not currently hold a license in the HJR?
    • Correct
  • Turner – So Las Vegas Sands and others are interested; what is the range of what one of these licenses might be worth?
    • Depends on the market you’re looking at
    • In active negotiations for licenses and can’t currently comment
  • Turner – DFW?
    • In negotiations and assume other companies are doing the same
  • Turner – Can’t give us a range?
    • Not right now, sorry

 

George Zodrow, Las Vegas Sands – For

  • Presenting estimates on economic impact to the state prepared for Las Vegas Sands
  • Dallas and Houston resorts would account for 30-40% of revenue, San Antonio about 15%
  • Total construction about $9.2b
  • 48k FTE jobs, $8.3b GDP impact, 25k FTEs/year for construction
  • S Thompson – Would that be cumulative jobs for all casinos?
    • Yes; construction jobs would only last term of construction period
  • S Thompson – How long do you think it would be until we saw a decline from gaming revenue?
    • Not a gaming expert

 

Nita Battise, Alabama-Coushatta Tribe of Texas – On

  • Along with Ysleta del Sur Pueblo and Kickapoo Tribe of Texas one of 3 federally recognized tribes
  • HJR should include the 3 tribes, do not think HJR currently does this
  • Tribes wanting to offer gaming can only do so through Tribal-State Compact; Rep. Geren included waiver of sovereignty if Gov fails to negotiate in good faith, also found in HJR 156
  • Provision is important as Gov has consistently denied Kickapoo tribe, Gov and AG fought Alabama-Coushatta tribe on online bingo
  • S Thompson – Gov has not entered into any compact with any tribe in TX?
    • No federally recognized tribe in Texas
  • S Thompson – Native American means you were here first
  • Geren – In the CS, requires Gov negotiating in good faith, if he is not gives tribe ability to go to federal court, sovereign immunity is waived
  • Chair Hunter – Suggest you go by Rep. Geren’s office to see the CS

 

Mary Smith, Concerned Women for America – Against

  • Have heard that gaming would bring revenue to state, but lottery did not bring in expected revenues for school
  • Huge number of sex trafficking and drug trafficking around casinos
  • Destination resorts is a way to get around intent of casinos
  • Do not need a casino in the state, asking committee to not move bill forward

 

Carlton Schwab, Texas Economic Development Council – For

  • In job creation, looking at largest economic development project in the state, brings revenue leaking to other states back in state
  • Economic development is about bringing new dollars into the area or keeping economic activity from leaking out of the region; this has potential to do both

 

Rob Werstler, Texas Quarter Horse Association – On

  • Support anything in concept that furthers Texas horse industry
  • Have some areas of concern, one is decoupling wherein racetracks are shuttered after gaming licenses are obtained, legislation does not require maintaining tracks
  • Part of intent of bill is to enhance horse industry in TX, it does nothing to support Texas horses
  • Another issue is number of race gates available, would like to see this increase
  • Important to continue to have standalone racing commission

 

Jonathan Covey, Texas Values – Against

  • Highlights negative impact on family by those with gambling problems
  • HJR would greatly multiply the negative social impact, have seen this in other states

 

Texas Eagle Forum – Against

  • TX does not want to be like other states, most people testifying in support are not Texans
  • American consumers experience over $1b/year in gambling losses, $1t in next 8 years if trend continues
  • Shouldn’t grab for money mostly based on addiction
  • HJR asks for applicants of good moral character, good integrity, don’t see how participating in the industry shows that

 

Garrett Coppedge, Texas Hotel & Lodging Association – For

  • Passage would create economic boom across commercial sector, not just authorized casino resorts; a lot of business is going to other states that could be kept in Texas
  • Texas will be unmatched in competing for these types of events if HJR passes

 

Cindy Asmussen, Southern Baptists of Texas Convention – Against

  • Money cannot be the driving force for legalizing vices in the state
  • TX has been successful without state-sanctioned predatory gambling
  • If 70% of revenue is nongaming, can build the destination resorts without the gaming component
  • Highlights negative impact of gambling, doesn’t create a new product and incurs major social and economic costs

 

Tom Giovanetti, Institute for Policy Innovation – Against

  • Not against gambling, no compelling reason for state to bar casino gambling, but scheme outlined in HJR and HB is flawed, doesn’t create a market

 

Baptist General Convention of Texas – Against

  • People have already decided on this issue, decided when they elected you
  • Not the first time an issue like this has come with grand promises, e.g. lottery didn’t solve education
  • Presents info on revenue to state from 15%, $.01 revenue from profit on slot machines; would need $190b to see a return on investment
  • Raymond – Had many people ask me to vote for this; are you saying the legislation should be taking a bigger percentage for the state?
    • Quantifying the amount of revenue
  • Raymond – Should legislation be amended so the state gets a bigger percentage?

 

Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Would like the Kickapoo to be treated equitably under this bill
  • Like the fact IGRA was incorporated in the bill, but still need a Class 3 compact language
  • Tribe has an inferior geographic location, if this passes will be an economic disaster
  • Proposes they provide the Kickapoo with a different site

 

Evan Kirkham, Self and Outlier – For

  • Was not present

 

Arturo McDowell, Self – For

  • Attest that casinos bring a great deal of value to the areas they are in
  • Casinos outside of Las Vegas have set records in total revenue
  • Data shows areas with casinos do not result in higher rate of crime
  • Gives Texas another economic sector to increase GDP and our living experience

 

Jill Glover, Republican Party of Texas and Self – Against

  • Are opposed to casino gambling and other forms in our party platform
  • Reasons to justify expansion of gambling fail as there are real social and economic costs to families/individuals/community
  • Hope Republican members of this committee vote against this resolution

 

Paul James, Self – For

  • Private citizen and a conservative activist in Bexar County
  • Disagree with the statement that the entire party is against this resolution
  • Qualified voters of this state should have this choice
  • Are issues with rampant crime with the open border policy, but not related to this issue

 

Geren, in closing

  • Geren closes on the resolution

 

HJR 155 left pending

 

HB 2843 (Kuempel) Relating to the authorization, licensing, and regulation of casino gaming and sports wagering in this state, to the creation, powers, and duties of the Texas Gaming Commission, to support of the horse racing industry and reform of horse racing and greyhound racing conducted by certain persons, and to other provisions related to gambling; imposing and authorizing administrative and civil penalties; imposing taxes; imposing and authorizing fees; requiring occupational licenses; creating criminal offenses

  • Kuempel – Have a CS; bill is the enabling legislation of HJR 155 (Geren)
  • Will establish a robust regulatory regime and legal structure to assist law enforcement in cracking down on illegal gambling
  • Overviews bill; casino gaming footprint in Texas will be nothing like Nevada
  • Tax breakdown: 3% Gaming Commission, 2% to horse racing, 0.5% to establish a program for gambling issues ; legislature has discretion to allocate money differently
  • Bill is a work in process and highly recommend stakeholders and members to evolve this bill
  • Thompson – Not proposing this tax revenue will solve problems of education etc. like the Lottery Commission did?
    • No, just trying to capture lost revenue

 

Brynn Gibson, Las Vegas Sands – For

  • Have had a robust gaming regulatory structure for decades; bill includes this
  • Is an extremely difficult process to get into and bad actors are barred from getting in
  • Thompson – Asks about regulatory structure and number of licenses in state versus Nevada?
    • Yes, is front-loaded; have many more licenses in Nevada and tax collection 6.75%
  • Thompson – Problem gaming?
    • Problem gaming is an important problem; Gaming Commission can make as strong requirements as they need
    • Guardrails are the license being in the balance
  • Thompson – True that this bill will cause a bunch of tribes to come and open casinos here?
    • In my experience that is not true
  • Thompson – Would need a regime even though there are federal regulations for tribes?
    • Sets a standard for tribal negotiations in the state
  • Turner – 3k licenses in Nevada? Have a ceiling?
    • Nevada does not have a ceiling; is an extremely competitive market and many fall out
  • Turner – Do not have a system where someone bought a license from someone else?
    • Correct; before transfer of assets, needs to be a licensing event
  • Turner – If bill/HJR pass would gaming commission be vetting the details of that transaction?
    • Gives them broad powers, is no prohibition
  • Turner – Is a colleague who tweeted linking DOJ study saying that casinos have a link to organized crime?
    • Depends on strength of regulatory regime
  • Smithee – Did not see anything in the legislation that mentions organized crime, suggestion on language
    • Is a policy question; bill is strong
  • Smithee – “Person” is used in the bill; does this include an individual and entity?
    • Believe it is both
  • Smithee – Permit can be issued to entities/individuals?
    • Correct; are qualifiers
  • Raymond and Gibson discuss casino hold percentages
  • Raymond – Bill gets into Commission expectations? Mirrors what you have?
    • Yes

 

Randall Brant, Dallas Black Chamber of Commerce – For

  • Biggest thing we lose direct/indirect gaming and resort revenues

 

John Litzler, Texas Baptist Christian Life Commission – Against

  • Bill would negatively impact crime rates, mental health, bankruptcy, and addiction
  • Churches are on the frontlines on the fallout of this issue
  • Texas is sitting on a surplus and does not need the additional revenues as a result of this bill

 

Nita Battise, Alabama Coshatta Tribe – Neutral

  • Thanks Geren for the language on the compact language; will need to continue to work ono

 

Las Vegas Sands – For

  • Raymond – Asks about the tax rate
    • Nevada is 6.75% and proposed is 15%

 

Jonathan Covey, Texas Values – Against

  • Did not testify

 

Cindi Castilla, Texas Eagle Forum and Self – Against

  • Did not testify

 

Rob Werstler, Texas Quarter Horse Association and Self – Neutral

  • Want to include language we mentioned in previous testimony; appreciate being included in the bill

 

Cindy Asmussen, Southern Baptist of Texas Convention – Against

  • Did not testify

 

Harrison Blair, Dallas Black Chamber of Commerce – For

  • Would bring considerable economic development options for the state; would bring billions back to Texas

 

Tom Giovanetti, Institute for Policy Innovation – Against

  • Do not oppose removing the state ban, but have problems with this specific scheme
  • Creates artificial scarcity by limiting licenses
  • Bill centralizes everything in Austin and prescribes only a limited number of gigantic destination resorts
  • Why not just pass a constitutional amendment that removes the prohibition like Smithee mentioned earlier
  • Raymond – Identify as a libertarian?
    • Favor radically limited government
  • Raymond – Think this is better than what is in other states?
    • Is an opportunity is to create a unique Texas model; do not like what is in other states
    • Model is probably currently better what is out there

 

Rob Koehler, Christian Life Commission – Against

  • Do not have anything to add from previous testimony

 

Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Opposes this bill; want to get the IGRA piece straight and need certainty
  • Legislature can do the compact in the bill; no need to send us to negotiations with the governor
  • Tribe requests a proposed amendment for another site due to the dramatic reduction in revenue likely to occur after this bill is passed
  • Thompson – Property the Kickapoo own the land now?
    • Do not
  • Thompson – IGRA lets them have latitude outside of the legislation?
    • Would be under state law

 

George Zerow, Self – For

  • Did not testify

 

Steve Bresnen, Bingo Interest Group – Against

  • Did not testify

 

Glenn Hamer, Texas Association of Business – For

  • Bill would make Texas even more economically competitive especially in tourism

 

Xingang Chang, Self – Against

  • Against as this bill promotes gambling; will overall negatively impact the state
  • Profits will help casinos, not Texans

 

Kuempel, in closing

  • Kuempel closes

 

HB 2843 left pending

 

HB 3033 (Landgraf) Relating to attorney general decisions under the public information law

  • Landgraf – Working on a CS, but is not ready now; will focus on provisions that will stay in bill
  • When a governing entity requests an AG opinion as to what is covered by disclosure; establishes a deadline
  • Creates an online searchable database on previous OAG rulings

 

HB 3033 left pending

 

HB 2374 (Landgraf | et al.) Relating to the authority of a political subdivision to regulate an energy source or engine

  • Landgraf – In response to a muni that announced plan to phase out gas-powered tools
  • Preempts political subdivisions from banning engines/energy sources; preempts gas stations or any related entity from being banned

 

Todd Staples, Texas Oil and Gas Association – For

  • If local governments are allowed to do this, would have to ban internal combustion engine generators that hospitals use

 

Gregory Porter, Texas Liberty Council and Self – For

  • Did not testify

 

Tom Glass, Texas Constitutional Enforcement and Self – For

  • Did not testify

 

Ivan Geraldo, Cleanscapes – For

  • Provide landscape services across the state
  • Cities like Dallas have begun to implement a plan to ban these engines; want to make a transition to battery powered on our own terms

 

Cyrus Reed, Sierra Club – Against

  • Did not testify

 

Matt Coday, – Oil & Gas Workers Association and Self – For

  • Radical environmentalists are trying to implement a Green New Deal at local levels

 

Claydon Danabashan, Self – Against

  • Learned local government is accountable to voter on the local level; should let democracy decide

 

John Gordon, Self – For

  • Registered electrical engineer; is needed legislation as there are many applications in municipalities in using different fuel

 

Landgraf, in closing

  • Landgraf closes

 

HB 2374 left pending

 

HB 1443 (Slawson) Relating to the operation of a wind-powered generation facility near a joint-use airport

  • Slawson – Have a CS; bill is the Fort Hood airspace protection act
  • Have a resource witness to answer technical questions
  • Spiller – CS restricted location to areas that would affect my district; have wind turbines in my counties; concerned they would have to be shut down
    • Is not the intent to shut down any operating there; is focused on Lampasas area
  • Spiller – Know there are processes in place to vet these things, but still concerned
    • Would defer to resource witness on those specific processes

 

Scott Nutter, Fort Hood Director of Aviation Operations – Neutral

  • Spiller – Asks about vetting processes in place; any that would have to shut down?
    • Is a process in place; bill would not affect what is already there
    • Are in mitigation agreements with some wind processes
    • Wind turbines greatly affect our operations
  • Spiller – Know of any wind turbine facilities erected against any desires of military bases?
    • Cannot speak to that; not that I am aware

 

Ray Wilkerson, Self – For

  • Support the bill

 

Charlie Malouf, Texas Twister – Against

  • Opposed to this bill; asked for a variance in height not to exceed 100 ft; want to work with bill author on this

 

Anthony Rock, Advanced Power Alliance – Against

  • Wind power industry strives to work in a collaborative way with the military and private property owners
  • Current review processes are working is a case by case basis DOJ takes
  • No turbine has been constructed where a DOH has been denied
  • Bill is unnecessary governmental overreach

 

Keith Sledd, Self and Heart of Texas Defense Alliance – For

  • Fully support bill; will allow for low-level aviation training
  • Spiller – Concern is shutting down turbines in my counties; CS seems to say they cannot operate
    • Not intent to shut down currently operating; may be a language issue
    • Is about new development
    • Think that the witness who offered exemptions for those 100 ft and under would be acceptable

 

In closing

  • Slawson – Bill states that this applies to new development; will work with Spiller if needed

 

HB 1443 left pending

 

HB 2663 (Tepper) Relating to the initiation of customer choice by municipally owned utilities that provide electric service

  • Tepper – Seeks to clarify which entity would be a provider of last resort for municipally-owned utilities and responsibilities of munis as it relates to billing
  • Lubbock Power and Light serves as the third largest municipally owned utility in Texas
  • May 2021 LP&L transferred 70% of customers to ERCOT and plan to transfer remaining 30% in May 2023
  • Bill aligns with this goal to be the first municipally owned utility to move its remaining customers to ERCOT since 1999
  • LP&L has been working with ERCOT, PUC and industry stakeholders to work on this
  • LP&L does not intent to serve as a retail electric provider; cannot serve as the provider of last resort, would like to delegate this decision authority to the PUC
  • LP&L do not seek to serve as the billing agent for electric customers; clarifies they will receive a consolidated bill from their retail provider of choice

 

HB 2663 left pending

 

HB 2664 (Tepper) Relating to the disclosure of customer information by government-operated utilities

  • Tepper – Companion to HB 2663; as LP&L moves to transmission distribution would migrate information from LP&L to ERCOT

 

HB 2664 left pending

 

HB 2206 (Patterson) Relating to a prohibition of certain social media platforms developed or provided by certain foreign entities.

  • Patterson – Lays out the bill; prohibits social media platforms developed or provided by companies/governmental entities/citizens of: China, North Korea, Iran, or Russia

 

Xingang Chang, Self – Against

  • Fully against this bill; is prejudicial and is not what this state is about

 

Hugh Li, President Austin-Chinese American Network – Against

  • Are the largest Chinese American organization in Texas
  • Bill violates over 100 laws, is prejudicial, and would not stand up in court

 

Ming Ye, Self – Against

  • Against a bill that targets specific countries; all Chinese people should not be equated with communism; not all Chinese people support the government or the communist party

 

Dr. Wei Lei, Self – Against

  • Resident of College Station; freedom of association is a basic human right
  • Many churches and individuals use WeChat to connect with members, family, loved ones; would be banned under this bill
  • Raymond – Reads provisions of the bill; are there other platforms that you can use to talk to loved ones?
    • No

 

Jiang Chen, Self – Against

  • Against bill; am also concerned about individual privacy issues, but use WeChat to speak with family in China as Facebook is banned there

 

Yun Hu Wong, Self – Against

  • Feel like Asian Americans are in an awkward situation, feel we do not belong anywhere
  • Any bill that discriminates like this is not good for the people of this state
  • Also use WeChat to talk with relatives in China; is the only way to communicate with them

 

A Ran, Self – Against

  • Am a research scientist at UT Austin; WeChat serves a crucial role in maintaining global community and market
  • Is currently the only viable option for both personal/business communications with China

 

In closing

  • Turner – How is this bill enforced if it passes? Geofense the app store?
    • Envision something similar to how the critical infrastructure; governor and DPS would enforce
  • Geren – Have used Lockheed Martin as an example, but have they come to you with this specific problem?
    • Have not heard anything from them specifically; is a realistic marketplace reality

 

HB 2206 left pending

 

HB 613 (Vasut) Relating to charges imposed by a governmental body for providing copies of public information under the public information law.

  • Vasut – Incentivizes local governments to put local campaign finance reports online; prohibits a local gov from stalling when turning information over to the OAG
  • Have received comments from the OAG to narrow bill, will have a CS that addresses that
  • Spiller – Love the bill, but concerned about how they may have to eat the cost of providing a voluminous among of information
    • Have alternative language on that issue; may give discretionary language OAG
  • Thompson – Agree with Spiller, need some language on this

 

HB 613 left pending

 

HB 904 (Moody) Relating to definitions for purposes of gambling criminal offenses.

  • Moody – Currently certain fantasy sports betting is a crime in Texas; makes it legal to participates in fantasy sports; bill is not about sports betting generally

 

Rob Koehler, Christian Life Commission – Against

  • Did not testify

 

Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Did not testify

 

HB 904 left pending

 

HB 2142 (Guillen) Relating to definitions for purposes of gambling criminal offenses

  • Guillen – Revises the definition of “bet” in state law and provides an exemption for fantasy sports betting
  • Raymond – Did we not just hear this bill?
    • Is similar to Moody’s, but has differences

 

Stacy Stern, Coalition for Fantasy Sports and Underdog Fantasy – For

  • Clarifies they are games of skill, not luck based; similar to HB 904
  • Inclusive of all platforms and regardless of how it is designed; align with federal guidelines
  • 20 other states have clarified the same thing
  • Raymond – Differences between this and HB 904?
    • This is a better industry bill more competition and innovation in the space

 

Rob Koehler, Christian Life Commission – Against

  • Did not testify

 

 Jennifer Hughes, Kickapoo Traditional Tribe of Texas – Against

  • Opposed to bill as it does not include language to provide the tribe to offer fantasy gaming on Indian lands

 

HB 2142 left pending

 

HB 2609 (Guillen) Relating to access to criminal history record information by the Public Utility Commission of Texas

  • Guillen – Have a CS; allows the PUC to conduct background checks on current/potential employees with access to the electric grid
  • Working on another CS with the PUC to further enhance the safety of the grid

 

HB 2609 left pending

 

HB 3013 (Slawson) Relating to exempting certain contracts from procurement notice requirements

  • Slawson – Bill is a request from the General Land Office to cure unintended consequences of SB 799 87(R) which passed out of this committee unanimously
  • SB 799 added a provision for solicitations exceeding $20 to post NOI to procure on ESBD; will greatly extend procurement process
  • Bill exempts services necessary to respond to a natural disaster from this requirement

 

HB 3013 left pending

 

HB 2713 (Dean) Relating to the consideration of employee compensation and benefits in establishing the rates of electric utilities

  • Dean – Have a CS; streamlines PUC process when utilities go in for their rate cases; did something similar in 2019 for gas cases
  • Base salary compensation presumed reasonable if supported by third-party independent compensation study, but bonuses/incentive compensation are not
  • This legal back and forth costs the rate payer a lot of money
  • As long as total compensation supported by the study, all presumed reasonable
  • Not applied to executives and officers
  • PUC can still look into incentive compensation that is adverse to customers
  • Have spoken to all parties on this bill, have improved bill based on feedback

 

Thomas Brocato, Steering Committee of Cities Served by Oncor and Texas Coalition on Affordable Power – Neutral

  • Thanks to the author for refining bill after our discussions; still some work needed
  • Two fundamental concerns with this approach; not clear why these programs should have an advantage of having a presumption of reasonableness
  • For incentive compensation based on financial metrics, do not think rate payers should bear the cost of this; operational compensation does benefit rate payers

 

Jason Ryan, CenterPoint – For

  • This plan for gas in 2019 has made the process more efficient; think this bill does the same for electric

 

Alton Hall, City of Houston – Against

  • City has not met with Dean, but look forward to doing so to address issues we have with the bill
  • Requires regulatory authorities, which includes municipalities with original jurisdiction, presume employee compensation/benefits are reasonable/necessary including financial-based metrics
  • Including financial-based incentives/compensation goes against requirements of rate making
  • Shareholders benefit from these programs, not the rate payer
  • Dean – Happy to visit with you, but have not heard from anyone from the city of Houston
  • Dean and Hall discuss financial-based benefits and whether they meet independent compensation studies
  • Dean – Will work with you on this

 

Katie Coleman, Self and Texas Association of Manufacturers – Neutral

  • Did not testify

 

Thomas Gleeson, Public Utility Commission – Neutral

  • Thompson – Are these charges allowed at this time?
    • Incentive compensation based on financial metrics have been disallowed
  • Thompson – Has the agency’s position changed on that?
    • No
  • Dean – Did this for gas utilities, why is this different?
    • Do not regulate gas, that’s the RRC; always happy to get prescriptive direction from the legislature
  • Dean – Seen how this has positively impacted gas utility’s rate cases?
    • Do not know, but take other people’s word it has decreased cost of litigation

 

HB 2713 left pending