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Critic: Texas' Gambling License Fees Too Low

AUSTIN, Texas – As reported by the Houston Chronicle: "If Texas wants to profit from expanded gambling, it should charge racetrack owners a much higher price than has been proposed for licenses to operate video lottery terminals, or slot machines, a critic of the plan said Tuesday.

"Jeff Hooke, an investment banker and consultant from Maryland, said a plan being considered by a House committee would charge racetracks only a 'nominal fee' for licenses worth many millions of dollars.

"…Racing industry representatives, however, said they were facing huge startup costs for slot machine operations and disputed the claim that the proposed state fees were 'nominal.'

"A video lottery plan proposed to the House Select Committee on Public School Finance by state Rep. Jim Pitts, R-Waxahachie, would require each track to pay a $100,000 fee to the state for a five-year video lottery terminal license, a $25,000 fee for each machine it operated and remit 60 percent of its revenue from the machines to the state.

"…Hooke said the state could auction the licenses for cash to the highest qualified bidders or auction licenses to bidders offering to take the lowest percentage of revenue from the machines.

"He said the state of Illinois auctioned a casino license in suburban Chicago last month for $518 million. He said a video lottery terminal license is comparable in value to a casino license because slot machines provide 75 percent of casino profits…"

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