Neighboring States, Tribes Receive Billions in Revenue From Legal Casinos

State governments and Native American tribes surrounding Texas receive billions of dollars in revenue from legal casino gambling and sports wagering.

Political scientist Dr. Clyde Barrow at the University of Texas Rio Grande Valley confirmed to The Texan that Texans spend about $5 billion annually at casinos in bordering states and Nevada.

There are several monumental hurdles for supporters to leap before breaking ground on casinos in the Lone Star State, but it could happen as soon as 2024 if they are successful during next year’s 88th Legislature. Opponents contend that the social costs of casinos or a legal sports betting market would outweigh the limited fiscal advantages.

Meanwhile, Texans still have plenty of options to gamble, even if they have to drive farther. The state’s lottery and approximately 1,300 licensed charitable bingo operations are among the limited exceptions to the gambling ban found in the Texas Constitution.

Oklahoma has only two commercial casinos but 138 tribal casinos, according to the American Gaming Association (AGA). Casinos in Durant, Oklahoma and other locations near the Red River are popular destinations for those in the Dallas-Fort Worth metroplex.

Native American tribes benefit most from the revenue of gambling in the Sooner State. The AGA indicated that Oklahoma taxed the two commercial casinos $55.9 million in 2021. The “tax impact & tribal revenue share” for the Native American casinos was $1.64 billion.

In New Mexico, most casinos are in the northern part of the state, though there are a handful in the vicinity of El Paso like the Sunland Park Racetrack & Casino, which sits just outside city limits. The Land of Enchantment has 21 tribal casinos and five commercial casinos. Excluding the state lottery, gambling taxes provide about $125 million in revenue, according to the New Mexico Legislature.

Easily accessible to East Texans and those in the Houston area, Louisiana is home to 19 commercial casinos and five tribal casinos. The AGA stated that the state’s commercial casinos had a $1.38 billion tax impact. The tribal revenue share and tax impact was $120.5 million.

The State of Arkansas reported $83.2 million in tax revenue from casino gambling and sports wagering from July 2021 through June 2022. The Natural State has no tribal casinos and only three commercial casinos in Hot Springs, West Memphis, and Pine Bluff.

Texarkana and other parts of northeastern Texas are only a two or three hour drive, making the Arkansas locations relatively convenient for a weekend excursion.

In order to legalize casinos, a majority of Texas voters would need to pass a constitutional amendment approved by the Legislature. Such a proposal would require a two-thirds vote in both houses of the Legislature.

Pro-casino interests have donated more than $1 million to Texas candidates on both sides of the aisle, including Governor Greg Abbott, Lt. Governor Dan Patrick, and Speaker Dade Phelan (R-Beaumont). All three have made statements ranging from ambivalence to outright opposition, and their support would be essential in getting a casino bill to the finish line.

Beto O’Rourke, the Democratic nominee for governor, expressed his support for legalizing casinos and sports betting at a campaign event earlier this year.

The only facilities operating in Texas that resemble casinos are the Lucky Eagle Casino in Eagle Pass, which is owned by the Kickapoo Traditional Tribe of Texas, and Naskila Gaming in Livingston, which is operated by the Alabama-Coushatta (AC) Tribe of Texas. The Speaking Rock Entertainment Center in El Paso also offers electronic bingo.

When it comes to the fiscal impact of legalizing casinos, economic development will likely be more persuasive than tax revenue to the cash-rich Texas government. Comptroller Glenn Hegar recently estimated there will be a $30 billion balance in the state’s account by the beginning of the 88th Legislature.

Promises of additional tax revenue may also fall on deaf ears if lawmakers are more primed to cut expenses rather than find new money to spend. Opponents tend to bristle at the prospect of the government pursuing new opportunities to collect taxes.

Polling suggests that Texans are amenable to legal casinos, but politically speaking, the salient factor is what is popular with Republican primary voters.

The Republican Party of Texas adopted a platform plank at its convention in June that explicitly condemns repealing the state’s casino ban.

“We oppose any expansion of gambling, including legalized casino gambling. We oppose and call for a veto of any budget that relies on expansion of legalized gambling as a method of finance,” the platform states.

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