• THE LEDE: Gambling expansion will be a contentious topic in Texas.

• LEGAL and REGULATORY ROUNDUP: KY has a new casino and DFS bill; GA voters support legal sports betting.

• NEWS: CA judge denies TRO request against cardrooms; okays video monitoring.

• VIEWS: Several states are likely to “turn the screws” and try to raise sports betting tax rates in 2025.

• AROUND the WATERCOOLER: Trump Jr. joins Kalshi as Strategic Advisor.

• STRAY THOUGHTS: The best gambling Substacks (besides this one).

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Sporttrade is now live in their fifth state; Virginia

Let’s talk about Texas, one of the industry’s biggest prizes on the gambling expansion front.

As I wrote last month:

“There will be a massive, knock-down, drag-out fight to legalize sports betting in Texas in 2025. With legislative opportunities limited to odd-numbered years, another swing and miss in Texas push legalization off until 2027, at the earliest.”

According to the Houston Chronicle, the Texas Public Policy Foundation has joined the fray to counteract the “army of [pro-gambling] lobbyists” that have descended on Austin in the lead-up to the 2025 legislative session.

According to the Houston Chronicle, the “Sports Betting Alliance, BetMGM, Caesar’s, Boyd Gaming, and Landry’s Entertainment are among those contributing to the nearly 350 lobbyists in Texas who are registered to work on gambling issues — a 40% increase in just four years.”

The Houston Chronicle singled out two casino magnates as leading the efforts to bring casinos to the Lone Star State:

• Texas native Tilman Fertitta (who has been nominated to be US Ambassador to Italy by Donald Trump) gave more than $1 million to Abbott’s 2022 reelection and let Abbott use his private plane. He’s also given $450,000 to Abbott’s 2026 reelection.

• Las Vegas Sands majority owner Miriam Adelson donated $1.5 million to Abbott’s reelection campaign in 2022. LVS bought a controlling interest in the Dallas Mavericks and has created a political action committee in Texas to promote casino legislation.

As one industry source told STTP, LVS didn’t buy the Mavericks because it wanted to own a basketball team.

But that army still faces an uphill battle. In a recently released study by the TPPF, the influential group warns that the potential tax revenue (which the group admits would be up to $800 million per year) is only one side of the gambling expansion coin, as it “would increase social problems, such as gambling addiction, mental illness, and crime.”

“There is no denying that expanding casino gambling is associated with an increase in state and local tax revenues,” the report states. “However, this new tax revenue is offset by correlated negative phenomena like gambling addiction and crime.”

The hurdles are not insignificant.

The Texas Constitution requires a constitutional amendment to expand gambling in the state. That requires a two-thirds majority in the Senate (21 of the 31 seats) and the House and a public referendum.

There are also political roadblocks, most notably, Lt. Gov. Dan Patrick, who has been adamant that if (a very big if) he was to bring a gambling vote to the floor, it would need to have a majority of Republican Senators on board. The last count had three or four Republican Senators supporting gambling expansions.

Then, there is the currently vacant Speakership, as Rep. Dade Phelan will not seek the speakership in 2025. You may recall Patrick was highly critical of Phelan letting Democrat-supported gambling bills get to the floor.

“The difference between the Senate and the House is we don’t let the Democrats run the Senate. We know how to work across the aisle without ceding power to the other side to let them run the Senate like Dade lets Democrats run the House. We’re a Republican state.”

According to the Texas Tribune, GOP Reps. Dustin Burrows and David Cook are the two Republicans vying for the speaker’s chair. In 2023, Burrows voted against casino gambling and mobile sports betting, while Cook voted for both.

Casino and DFS bill emerges in Kentucky: Kentucky State Rep. Thomas Huff has introduced a bill that would legalize and regulate daily fantasy sports and, more importantly, bring land-based casinos to the state. The bill, HB33, allows countywide voter referendums in counties with a population of at least 30,000 residents, which includes a pre-referendum signature-gathering initiative that requires “25% of the voting population of that county during the previous election,” per SBC Americas. Previous casino bills have run into a brick wall with the words Churchill Downs spray-painted across it.

Georgia poll indicates strong support for legal sports betting: Per the Atlanta Journal-Consitution, “A University of Georgia poll commissioned by the Metro Atlanta Chamber found some 63% of registered voters support letting adults legally bet on sports. A majority (54%) said they would be more likely to support legalized sports betting if it would discourage residents from crossing the state line or using offshore websites to place wagers. Nearly 80% say they’re more likely to back legalized sports betting if all the revenues generated pay for education programs like the HOPE scholarship and pre-K programs.” Interestingly, 80% of voters favored a constitutional amendment via a voter referendum over legislative approval.

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One of the biggest stories of 2024 was the passage of SB 549 in California. The bill provided tribes a single opportunity to sue California cardrooms for offering illegal games. Previous legal efforts were thrown out on the grounds that tribal sovereign nations didn’t have standing to sue in California courts.

The tribes wasted little time. On January 2, seven tribes filed suit against every licensed cardroom in the state and asked the courts to issue a temporary restraining order against cardrooms offering the games in question.

As reported in the Sacramento Bee:

“Seven tribes — the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Pechanga Band of Indians, the Sycuan Band of the Kumeyaay Nation, the Viejas Band of Kumeyaay Indians, the Yocha Dehe Wintun Nation and the Yuhaaviatam of San Manuel Nation — brought the suit, filed by the San Francisco-based law firm Keker, Van Nest & Peters.”

Now that the case is underway, we have some intriguing updates. iGaming Business reports that Judge Lauri Damrell “declined to order the cardrooms to suspend offering certain games. 

“However, she did not deny the request from the tribes for the card rooms to provide video surveillance of the games in question in the lawsuit.”

The cardrooms and tribes were required to reach an agreement on how to provide the video footage. iGB also notes that “an informal discovery hearing will also be held today [meaning yesterday].”

With legalization (be it online sports betting or online casinos) heading into 2025 with an over/under of .5, one has to wonder if states will continue to look for new gambling revenues from existing operators.

The industry has already taken two hits on the chin, with Ohio and Illinois raising the tax rate on sports betting operators (from 10% to 20% in Ohio and from 15% to a graduated 20%-40% rate in Illinois). It’s also taken several body shots, with Colorado, Louisiana, and Virginia previously amending the amount of promotional deductions operators can claim.

Where might similar proposals pop up in 2025?

First, I would start with the five states that proposed tax rate increases in 2024: Massachusetts, Maryland, New Jersey, Michigan, and Louisiana.

I would keep a close eye on any state with a modest sports betting tax rate, with the caveat that, as I recently wrote, “A bill is just a bill. Some have legs, and some are interesting, but most… are simply pieces of paper filed by rank-and-file members that are destined for the waste bin.”

I would pay particular attention to states with low sports betting tax rates, like Indiana and Iowa, that are struggling to legalize online casinos.

Finally, Blue states (Red states tend to find taxes anathema) that are either facing budget deficits or debating the “evils” of expanded online gambling (Massachusetts comes to mind) could also travel down this path. As I’ve previously said, the best way to rein in an industry is to kneecap it with excessive burdens.

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Social media conversations, rumors, and gossip.

Everything I’ve been saying about election betting (in my 2025 prediction column and yesterday)… yeah, I may have to rethink that after seeing this tweet:

As Dustin Gouker said in yesterday’s Closing Line newsletter:

“If you needed a sign about how the incoming administration might handle prediction markets, here’s one in flashing neon lights.”

Stealing this idea from Underdog Fantasy’s Dillon Borgida, who was kind enough to include me in his reading and listening recommendations on LinkedIn.

Industry Substacks I highly recommend:

Bettor-focused Substacks I highly recommend: