Sin taxes may soon not be as sinful in Texas, a state that has opposed gambling and betting for years, and that may now be looking to give these activities some regulatory leeway.
Texas Sees Sin Taxes as an Opportunity to Generate Revenue
Texas is drawing closer to the legalization of several sin taxes, and more important than most, sports betting. While the state, which is one of the last hold-outs where gambling is illegal by and large, is still opposed in principle, the pandemic has expedited the timeline for the adoption of alternative sources of revenue.
So much that even the late Sheldon Adelson, former CEO and founder of Las Vegas Sands Corp., hired lobbyists last year to start canvassing for a casino project in the state. Early in 2020, Rep. Eddie Lucio III filed H 1275 debating a possible future for sports betting in the state.
Today, at least 13 states are trying to legalize sports betting in the United States, with California and New York making a strong dash for the top. They are going to join the 20 or so states to have already legalized the activity already.
The promise of a legalized sports industry is tempting as the 15 states that report data have seen collective revenue of $129 million in taxes since July, with pent-up demand peaking in October, November and December.
A Fraught Push for Regulating Betting in 2021
Michigan has just confirmed that mobile sports betting is going live on Friday, January 22, and Iowa suspended in-person registration on January 1, liberalizing the market further. In 2021, we should see numerous other states join the ranks of states where sports betting is available, and not least Virginia and Maryland.
The biggest mover this year is clearly going to be New York, which is still far behind New Jersey, its neighbor, in terms of tax collection from sports. The reason behind this is that the Empire State has limited betting to retail businesses, which is not efficient.
Many, including State Senator Joseph Addabbo, one of the staunchest and year-long supporters of a liberalized gambling market, is hoping that New York may see legalized mobile betting soon enough.
However, in his latest address on Tuesday, Gov. Andrew Cuomo seemed disinclined to endorse the move and has suggested that the state stands to generate $500 million on its own – not specifying the period – if it imposed a state monopoly.
Sin Taxes on Recreational Marijuana
Stakeholders have cautioned that monopolizing state betting would not allow New York to reach its potential so far as the industry is concerned. In this context, Texas will seek to explore casino gaming, sports betting, and not least recreational marijuana.
Should Texas go ahead, it would be the first state in the country to actually succeed in introducing a bill this year, and if forecasts are accurate, the state may stand to benefit from $500 million annually in tax revenue, as well as lead to 40,000 new jobs in the industry.
Talks to introduce new sin taxes have been a hot topic since at least last year with the legalization of poker, casino and betting activities brought up repeatedly. According to sources, Gov. Greg Abbott has reached out to lobbyists to discuss the potential implementation of sports betting in the state.
Not least, Texas has powerful sports franchises that could be interested in the potential to generate additional revenue through sports betting. Popular backers of a legalized sports betting industry in the state include Jerry Jones of the Dallas Cowboys, Mark Cuban of the Dallas Mavericks and Tilman Fertitta of the Houston Rockets.