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Lone Star State Game Expansion Faces Texas-Sized Obstacles

Texas lawmakers will raise the issue of game expansion again during a session of the state legislature that begins next week.

And as in previous years, the game bill is as likely to get through the Lone Star State Legislature as the Dallas Cowboys win the Super Bowl with quarterback Tony Romo.

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“There are a lot of opponents and hurdles that are getting Texas in the way of game expansion any time soon,” Union Gaming Group managing director Billerner told investors, including religious groups, out-of-state gaming interests, conservative Congress and animal rights groups.

National game expansion talks always focus on Texas when the state legislature holds about five months of meetings in odd years.

Texas is the second most populous state in the U.S., with more than 26 million residents. There are five racetracks. The Texas Lottery generated nearly $4.2 billion in sales in fiscal year 2012. The Kikapu Traditional Tribe of Texas has two small casinos equipped with bingo and poker, which are slot machines in the form of a video lottery.

But for a full-fledged casino game, Texans head east to a commercial casino in Louisiana or north to an Indian casino in Oklahoma, which rages those who favor gambling.

Defenders of the game make the same argument in each legislative session. Without the game, Texas is losing millions of dollars in tax revenue, billions of dollars in investment, thousands of jobs and millions of tourists.

In 2011, Texas lawmakers considered 17 different game proposals, including eight Las Vegas-style hotel casinos and slot machines at Texas racetracks.

PokerFuse, an Internet site, reported on New Year’s Day that a member of the Austin legislature will propose a bill that would allow the state lottery committee to regulate live poker tables, racetracks, and bingo facilities run by Indian tribes. The bill will ban electronic poker tables, although it is not about Internet poker.

“Game discussions are going to be an uphill battle,” Lerner said, “and the need for additional revenue won’t be a key selling point because the state is likely to run a cash surplus.”

Gambling legislation requires the support of two-thirds of each legislature, as well as voter approval, in a statewide referendum. Republican Gov. Rick Perry and Republicans have opposed expanding gambling in the past.

Former state senator John Monford, who now works for a pro-gaming expansion group, told The Associated Press that efforts should be made to keep the Texas dollar in Texas.

“We’re losing money to other states,” he said, “and why not regulate, take action, and put money in the finance ministry?”

With the exception of Nevada’s slot machine manufacturing, which makes financial gains whenever a new gaming market opens, Pinnacle Entertainment has become the most focused casino company in Texas.

Pinnacle owns the Retama Park racetrack near San Antonio, which is expected to be able to capitalize if slot machines are allowed at the Paris Mutual Wear Facility.

But Pinnacle also has a significant investment in the L’Auberge du Lac resort, which is a flagship of the L’Auberge du Lac resort and attracts most of its customers in Houston, about 144 miles down Highway 10.

Pinnacle plans to complete the construction of a second $500 million hotel casino on Lake Charles, which it is acquiring as part of its $869 million acquisition of the Amerista Casino. The deal is expected to be completed by the middle of this year.

Credit Suisse game analyst Joel Simkins said the Pinnacle will complete the Lake Charles project, but it may scale back its development. The Pinnacle will invest more than $1 billion in Lake Charles.

Shimkins said, “It seems clear that Texas is going to end up playing some kind of game.” However, he said that even if the casino is approved in 2013, it could be 2017 or 2018 before the first card is traded.

Pinnacle shied away from the bet by buying the racetrack back in April. Penn National Gaming owns two tracks in Texas and hopes that a slot machine casino could one day be added.

Simkins said major gaming companies like Las Vegas Sands, MGM Resorts International and Wynn Resorts will be involved in legalizing Texas gaming.

Landry’s, which also owns the Golden Nugget casino brand, is headquartered in Houston and controlled by a wealthy Texas businessman, Tillman Fertita.

“This is the most focused effort we’ve ever seen in Texas, but there’s a low probability that anything will go through,” Simkins said.

The game still needs a Hail Mary pass to claim victory.

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