Jerry Jones to lead the charge?
Since the ending of the federal ban on sports betting in May 2018, there hasn’t been a strong push for sports betting legalization in Texas. However, the billionaire owner of the Dallas Cowboys, Jerry Jones, could give this measure a significant push forward.?
Kevin Sherrington from the Dallas Morning News has been looking into the legislative efforts to legalize sports betting in Texas to date. He lays out the potential for Jones to step in.
While it could be a long shot, Sherrington believes that Jerry Jones could be the person to sell sports betting in Texas.
The billionaire, who will usually comment on a story, did not want to discuss his potential role in sports betting.
The NFL is looking to use emerging sectors like sports betting to increase fan engagement. However, multiple NFL franchises in states with conservative gambling laws and higher population numbers make this difficult to achieve. There are three teams in Florida, four in California (which will shortly drop to three teams), and two in Texas.
Significant gambling interests
Jones also has an investment in DraftKings, a leading provider of daily fantasy sports and a major player in the burgeoning legal sports betting market.
As per NFL rules, Jones will have to sell off his stake in DraftKings if their go-to revenue source changes from fantasy offerings to sports betting operations. New England Patriots owner Robert Kraft also has an investment in DraftKings.
Finally, Legends Hospitality, a company of which Jones is a co-founder, made a joint bid with the Choctaw Nation Businesses in June. This went towards the development of a casino in Russellville, Arkansas.?
Push for legal sports betting
The Republican Party in Texas is against sports betting and most forms of gambling. This is a common trend in many conservative states, but some of them are changing their minds in view of the potential that sports betting holds.
Numerous Native American tribes do not want more gambling expansion as this will infringe upon their casino operations in nearby states. Because a lot of Texans go over to Oklahoma to gamble at the casinos legally, such tribes lobby against sports betting legalization.?
According to Sherrington, there have been over $5m worth of donations from the Choctaw Nation and the Chickasaw Nation to candidates and officeholders in Texas dating back to 2006. Houston native and Golden Nugget Casino owner, Tilman Fertitta, has made over $500,000 worth of donations to Greg Abbott, the current Texas Governor.
Texas sports betting market
According to estimates, the illegal market for sports betting in Texas is worth around $300m. The only bill to date to see Texas pushing for legal sports betting was House Bill 1275.
Proposed by Democrat representative Eddie Lucio in February 2019, it advocated legal sports betting for pro sports and certain college events, but was quickly shot down. In 2018, the GOP in Texas was officially against “the expansion of legalized gambling”.
An industry expert at consulting firm Eilers & Krejcik has observed that in Texas “the forces working against sports betting legalization, therefore, are entrenched and strong.” It would be a lucrative move for Texas in terms of the revenues they could generate.
According to Eilers & Krejcik, online sports betting on its own could see annual revenues of $1.2bn in Texas. If there was a conservative tax rate of 10% in place, the government would walk away with an additional $120m each year.
While the firm predicts there will be some type of legal sports betting in 31 states by the close of 2022, Florida, California, and Texas do not form part of the picture.
The consulting group believes there is more of a chance of seeing Texas edge its toes in by potentially legalizing fantasy sports in 2021. This means sports betting legalization could be on the Texan state’s table by 2023 or 2025.