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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Analyst sees little enthusiasm for Texas casino push

10 April 2013

A new push for gaming expansion in Texas drew muted commentary from analysts Tuesday.

They have been down that road before.

A Texas state senator said this week that he has support for legislation to bring 21 large and small casinos to Texas and create a state gaming commission.

Casino expansion bills surface routinely in the state’s biannual legislative sessions, but the measures have universally failed.

Union Gaming Group Managing Director Bill Lerner doesn’t see much difference with the latest proposal, which calls for a state constitutional amendment to expand gaming.

“The issue of bringing casinos to Texas has been around for quite some time, but we haven’t heard much optimism around potential passage,” Lerner told investors. “There are notable detractors against gaming expansion.”

The newest bill creates the Texas Gaming Commission and allows one casino each in Dallas, Fort Worth and San Antonio, with three additional casinos along the coast. Three racetracks in Dallas-Fort Worth, San Antonio and Houston could operate casinos, and nine small racetracks could apply for licenses to operate casinos or slot machines.

The Texas gaming tax rate would be 20 percent. If an operator invests more than $1 billion in a facility, the tax rate would be reduced to 15 percent.

A constitutional amendment, which requires a two-thirds vote in each house of the Texas Legislature, would bring the issue to voters and bypass Gov. Rick Perry’s veto. The governor has not supported expansion in the past.

The Legislature ends its session May 27 and won’t convene again until January 2015.

One of the primary arguments for casino expansion in Texas has been keeping tax dollars in the state. Texas residents travel to Indian casinos in Oklahoma and commercial casinos in Louisiana. Casinos in Texas could easily take business away from those markets.

Las Vegas-based Pinnacle Entertainment is the largest casino operator in Louisiana, with properties in Lake Charles, the Shreveport-Bossier City area and New Orleans. Pinnacle, which is buying rival Ameristar Casinos for an enterprise value of $2.8 billion, is acquiring the company’s under-construction casino in Lake Charles.

Pinnacle owns the Retama Park Racetrack near San Antonio.

“The Texas Legislature passing gaming would be a clear negative for Louisiana operators who pull significant visitation from the state,” Lerner said.
Analyst sees little enthusiasm for Texas casino push is republished from CasinoVendors.com.