Texas casino bill picks winners if games come to Lone Star State. Here are the big players

There’s more than just luck on the side of some people poised to cash in if casinos come to Texas.

A proposal by Rep. Charlie Geren, a Fort Worth Republican, sets the framework for how many commercial casinos would be allowed in the state, where they’d go and who would likely be in line to run them.

The bill would reward those with one of the state’s 10 horse or dog racing licenses. They would be able to open a casino without competition or sell the right to apply for a license so another business can. (Only 5 of the tracks have races scheduled for 2023.)

“That’s another question I’ve heard people raise is, why don’t we open all of these licenses up to open bidding to maximize revenue for the state?” said Rep. John Smithee, an Amarillo Republican, during a March committee hearing, questioning how the state would know the licenses are being sold for a fair amount.

A group of well-known gaming companies is leading the push for a limited number of destination resort casinos in Texas. They’ll have hotels, restaurants, meeting spaces, entertainment venues and shopping centers.

And Geren’s bill, described by supporters as a “compromise” between companies with gaming interest — such as the Chickasaw Nation, Penn Entertainment, the LaMantia Family of South Texas, Fertitta Entertainment and casino giant Las Vegas Sands — outlines who can apply. The companies and affiliated people have donated roughly $6 million to candidates in Texas since 2020.

Supporters of the bill say the licensing structure will allow for a quicker development of destination resorts while boosting the horse industry. But the casino licensing framework also limits the open bid process and transparency. Some Republicans have called a version of the measure “corporate welfare.”

That’s if Texas even expands gambling.

Geren’s bill would have to make it out of the House, where he’s convinced it has the votes, and Senate, where Lt. Gov. Dan Patrick says it doesn’t. The proposal would then go to voters as a constitutional amendment on a November ballot.

A complementary bill by Rep. John Kuempel, a Seguin Republican, would also have to pass and be approved by Gov. Greg Abbott. Both bills passed out of the House State Affairs committee Monday.

Getting in the game

Geren’s bill would allow for eight destination-resort casinos in the metro areas where racetracks are located: two in the Houston area, two in Dallas-Fort Worth, one each in the San Antonio, McAllen and Corpus Christi areas and one at an unspecified location.

The unspecified casino could go anywhere in the state as long as it is at least 100 miles away from one of the other cities. Voters in the area also would have had to approve casinos in Texas. The owner would be picked through bids.

People or companies that already had a license for horse and greyhound racing as of Jan. 1, 2022, could apply for a casino license or designate an outside person or organization to apply instead, presumably selling the rights to the person or business, such as Las Vegas Sands or another casino company. License holders could have only two casino licenses.

Of the 10 racing licenses in Texas, entertainment and casino company Penn Gaming owns three and one of its subsidiaries owns another, and the beer-distributor LaMantia family has three.

During a March committee hearing, lawmakers questioned how much a casino license would cost and how Texas would know it’s getting the best deal if the process is essentially narrowed to a few bidders, rather than an open process.

One political expert called the idea of distributing casino licenses through racing tracks “absurd.”

“That is handing out a huge benefit to a limited number of nameless people as far as the general public is concerned,” said Cal Jillson, a SMU political science professor. “The idea that these very valuable destination casino licenses should have to be attached to your current licensees for dog and horse tracks makes no sense whatsoever. And so, usually when there’s a huge benefit distributed by a state like Texas, you follow the money. So who’s gonna benefit from this?”

Applicants for a casino license would be required to pay a fee to the state of up to $2.5 million, depending on the location. Applying for a license doesn’t guarantee one. One of the qualifications is a promised investment ranging from $250 million to $2 billion.

The exact price a casino license would cost is unclear, and would depend on factors like location, the number of possible customers and expected profit, said Reilly White, an associate professor of finance at The University of New Mexico. He expected the going rate would vary from casino to casino. Under the right circumstances, it’s possible the license could be worth millions or tens of millions, White said.

So who are the players?

Las Vegas Sands

Las Vegas Sands is the most mentioned company when it comes to destination resort casinos in Texas. Sands, through its political action committee, has donated more than $2 million to Democrats and Republicans.

It also formed the Destination Resort Alliance to advocate for the mega-casinos, of which Tilman Feritta Entertainment, the LaMantia family, Penn Entertainment and the Chickasaw Nation are members.

Sands, worth more than $40 billion, sold its Las Vegas Strip properties in 2022 and has been focused on expanding in Asia and New York, according to the Las Vegas Review Journal.

But Sands has previously expressed interest in the Dallas area and is in negotiations for a casino license, Vice President of Government Relations J.T. Foley told lawmakers at the March committee hearing. He declined to elaborate on who they’re negotiating with.

“Some of the folks that have these racetrack association licenses won’t be able to utilize all of them for a casino, so you could potentially have several other players who come in and decide to be part of that,” said Christopher Hughes, an attorney for Sands. “If I was one of the large casino operators in the United States, I would probably be talking to folks about how to get into this market.”

Las Vegas Sands Senior Vice President Andy Abboud was not available to comment.

The Chickasaw Nation

The Chickasaw Nation would have the most direct path to opening a North Texas destination resort style casino.

Lone Star Park, a horse track in Grand Prairie, is owned by subsidiary companies of the Chickasaw Nation, the tribe that owns and operates the WinStar World Casino and Resort in Thackerville, Oklahoma.

The Chickasaw Nation has opposed efforts to expand gambling in Texas in the past. Allowing the tribe to have a commercial casino in the state could placate that pushback.

In a Feb. 3 statement, the tribe said it was interested in working with the Legislature on the bill. A representative was not available to comment further.

“The Chickasaw Nation has long been active in the Texas economy and committed to providing high-paying, quality jobs for Texans,” the tribe said. “Given our commitment to Texas, we look forward to engaging with their Legislature about the economic benefits and tens of thousands of jobs destination resorts will bring to the Lone Star State.”

The state of Oklahoma collected more than $191.5 million in fees paid by tribes to operate casino-style games as part of a state compact in fiscal year 2022, according to a report from the state’s Gaming Compliance Unit. The compact is required by federal law if tribes want to offer certain games. The tribes generated more than $3.19 billion in revenue.

Since 2020, the tribe has donated more than $1 million to candidates in Texas.

Geren’s bill would also allow for negotiations on a tribal-state compact to allow Texas’ federally recognized tribes to operate casino-style games in the state. Texas has some tribal casinos, but the compact would let them broaden the types of games offered.

Texas has three federally recognized tribes: The Alabama-Coushatta Tribe of Texas in Livingston, Ysleta del Sur Pueblo in El Paso and the Kickapoo Traditional Tribe of Texas in Eagle Pass.

Any destination-resort style casinos operated by the Chickashaw Nation in Texas would be considered a commercial casino and would have to follow state operational rules.

The LaMantia Family

The LaMantia family’s companies own the licenses for a greyhound track, Gulf Coast Racing in Corpus Christi, Laredo Downs in Laredo and Valle de los Tesoros in McAllen, both horse racing tracks that haven’t finished construction. Only the Corpus Christi track has races scheduled for 2023.

Their stakes in a Laredo track means that, like the Chickasaw Nation, the family or its designee may have a leg up when it comes to getting into the North Texas casino business. That’s because the bill states the holder of a Laredo racing license could open a Dallas-Fort Worth casino. The bill also allows a Brownsville-Harlingen area racing license holder to open a casino in the Houston area. All other racing license holders could only open a casino in their metro area.

Greg LaMantia, president of the company that owns the majority of Laredo Downs, wrote in an email that he wasn’t available to comment. His brother, Steve LaMantia, also a stakeholder in the Corpus, Laredo, and McAllen tracks or the companies that own them, did not return a request for comment.

The family is best known for its company that distributes Anheuser-Busch beers.

Morgan LaMantia is a South Padre Island Democrat serving her first term in the Texas Senate and is the niece of Greg LaMantia and the daughter of Steve LaMantia. A spokesperson for the senator said she would recuse herself from votes related to parimutuel gambling or alcohol-related legislation.

Members of the family have made a number of political donations in Texas over the years, including at least $360,000 since 2020.

Also of note: Former House Speaker Joe Straus, a San Antonio Republican, and members of his family hold stakes in the Laredo, Selma and McAllen racetracks. Democratic donor and attorney Mikal Watts owns 20% of the Corpus Christi track.

Penn Entertainment

Penn Entertainment, which effectively owns the most racing licenses in Texas, may also be looking to open casinos in Texas or designate at least one other entity to do so.

Penn Entertainment of Wyomissing, Pennsylvania, holds licenses for tracks in Manor, Houston and Harlingen. A company it acquired in 2018 owns the license for a track in Selma near San Antonio. Its four racing licenses means the $4.5 billion entertainment company could come out as one of the top beneficiaries were gambling to pass as proposed in Geren’s bill.

The $4.5 billion company is “hoping for the opportunity to help bring world-class resorts to Texas,” an effort that could lead to more than 120,000 construction-related jobs and more than 75,000 permanent jobs, said Eric Schippers, Penn’s senior vice president of public affairs and government relations.

“We’ve had some preliminary discussions with interested parties regarding the private sale of our excess licenses but it’s premature to provide further comment given it’s very early in the Legislative process,” he said in an email responding to written questions.

Schippers testified in favor of the legislation.

Jay Snowden serves as CEO and president of the publicly traded company. The company has 43 casinos and racetracks across the country and owns sports betting companies theScore and Barstool Sports.

The company in the March hearing advocated in favor of both destination resort casinos and online sports betting.

Political action committees affiliated with Penn Entertainment have contributed about $330,000 to candidates in Texas since 2020.

Tilman Fertitta

Representatives from Fertitta Entertainment also addressed lawmakers at the March committee hearing, suggesting they may too be interested in opening Texas casinos.

Houston billionaire Tilman Fertitta owns Fertitta Entertainment Inc., the parent company of Landry’s, a dining, hospitality and entertainment company. Fertitta also owns the Houston Rockets and Golden Nugget Casino and Hotel in Lake Charles, Louisiana.

Lt. Gov. Dan Patrick’s son-in-law Jared Scruggs is a lobbyist for the company, according to Texas Ethics Commission records. Scuggs was initially reached by phone but did not return subsequent requests for comment. A representative from the company was not made available for an interview.

Fertitta and an affiliated PAC have donated more than $2.1 million to candidates in Texas since 2020, including $400,000 to Patrick, Texas Ethics Commission records show. Fertitta Entertainment also paid $1,800 for Patrick and his staff to fly to a Donald Trump rally last year, records show.

“It’s no longer just about gaming,” said Gerry Del Prete, the company’s CEO of gaming during the committee hearing.

Del Prete explained that most of its casinos have hotels, restaurants, bars, convention space, stores and a spa and pools. Eighty percent of the company’s Lake Charles customers come from Texas, he said.

“We know how to operate and build first class destination resort casinos that attract tourism all over,” Del Prete said.

Charlie Geren

Geren doesn’t see his bill as picking winners and losers.

“I think the entire state will be winners, and we’ve picked areas that we feel like will support large resort developments,” he said.

And it’s not like every Texas billionaire is going to want to get in the casino game, Geren said.

“You have to pick people that understand the business,” he said.

Though there are other officials who’ve received larger sums, Geren has received some campaign dollars from groups involved in the push for expanded gambling since 2020: $10,000 from Texas Sands’ and Penn Entertainment’s PACs, $5,000 from the Chickasaw nation and $2,500 from Tilman Fertitta, according to Texas Ethics Commission records.

“Campaign contribution does not affect one vote I’ve ever made,” Geren said.

His wife, Mindly Ellmer, is an Austin lobbyist and represents the Texas Restaurant Association, as well as TRT Holdings, a company owned by Dallas billionaire Bob Rowling of Omni Hotels and Resorts. A request for comment was not returned. TRT Development Co. owns property in Corpus Christi, according to Nueces County Appraisal District records. Affiliated companies also own property in Dallas and Tarrant counties, appraisal district records show.

Omni doesn’t have casinos, but the hotel and restaurant industry are two that could benefit from destination style resorts.

Geren said Ellmer’s representation of the groups doesn’t represent a conflict of interest for him. Ellmer told the Star-Telegram that none of her clients are engaged in the effort to bring destination resort style casinos to Texas.

Geren, a restaurant owner himself, said he has voted against measures his wife has lobbied for and when there may be a conflict, he marks himself present but doesn’t vote for or against the bill. He doesn’t see the casino measure as affecting Ellmer’s clients.

“I’m not concerned about her job, and she’s not concerned about mine,” he said.

Ellmer has previously represented PM Texas LLC, which advocated for casinos in Texas through the group Let Texans Decide. Ellmer is no longer registered as a lobbyist for the group, according to the Texas Ethics Commission.

The Big Three

Gov. Greg Abbott and House Speaker Dade Phelan have expressed openness to casinos in Texas, were they to follow the resort-like model being proposed by Geren and others. Sen. Carol Alvarado has filed a similar bill in the Senate.

“If it can be built in a way that is, kind of like a professional operation that provides a form of entertainment for people, that’s something I can be open to,” Abbott told the Star-Telegram in a February interview.

Geren says his bill has enough support to pass in the House. On Monday, it was advanced by a panel of representatives, meaning it could come up for a floor debate.

“We’re trying to put a bill together that we can build and get our 100 votes, and this is where we thought we had to go in order to do it,” Geren said.

But some members have said they don’t support expanded gambling, and past pushes have fallen flat. The Texas Freedom Caucus in a March 19 post on Twitter pushed back against an earlier version of the measure and a separate bill that would let voters decide if online sports betting should be legal.

“This is corporate welfare at its worst by giving special privileges to existing wealthy and woke professional sports and gambling businesses,” the tweet said. “This isn’t a free market, and not worth the harm to families in Texas that comes from gambling addiction.”

Caucus member Rep. Nate Schatzline, a Fort Worth Republican, shared the post, raising concerns about potential increases in human and drug trafficking. In an interview, he reiterated those concerns and said the proposal gives certain businesses advantages.

“Ultimately, we have to protect our state,” Schatzline said.

Rep. Chris Turner, a Grand Prairie Democrat, asked several questions about how much a casino license costs during the committee hearing. A clear answer wasn’t provided.

“I think there is merit to what we heard from some of the witnesses, that the existing race track license holders have some expertise and experience and obviously have met current regulatory standards,” he told the Star-Telegram. “So, there’s some merit to starting there, but at the same time ... just like I want to make sure we get the best deal for the taxpayers, let’s not limit ourselves in who can participate.”

He does see opportunity for participation, but wants to study that part of the bill more.

Even if the bill advances out of the House, it still has to make it through the Senate, where an uphill climb is expected. It may be the place where the bills die for the session.

Patrick said in a March 23 episode of The Chad Hasty Show, a Lubbock radio show, that there aren’t enough votes in the Senate among Republicans for sports betting or expanded gambling.

“Lt. Gov. Patrick has repeated, over and over again in November, January, and March, that the Senate does not have the votes for expanded gambling,” spokesperson Steven Aranyi said in a statement. “Nothing has changed. No Republican filed a casino gambling bill in the Senate.”