Herman: The plan to dip into Texans’ pockets by combining gambling and alcohol – Austin American-Statesman

Ken Herman|Austin American-Statesman

Hmm, state Rep. Joe Moody pondered. Many Texans enjoy adult beverages. And many Texans like to gamble. What would you get if you combine those two pastimes?

What you get, he figures, is state revenue of the best kind, the kind that people voluntarily fork over. That's so much more popular than those pesky taxes that many Texans seem to dislike.

Which brings us to Moody's House Bill 817, relating to the operation of a quick draw lottery game. Thats quick draw as in gambling, podnuh, not guns.

HB 817 envisions a lottery game in which a drawing occurs 12 to 15 times per hour between the hours of 7 a.m. and 2 a.m.Lets see. Looks like thats as many as 285 drawings in 19 hours. Yep, that's quick draw.

And what can be done to help lubricate the flow of cash from Texans wallets into state coffers? Alcohol!

From HB 817: The (Lottery) commission may license as sales agents to sell quick draw lottery game tickets only holders of one of the following permits or licenses issued by the Texas Alcoholic Beverage Commission for locations that provide on-premises consumption of alcohol.

The list: a winery permit, a wine and malt beverage retailers permit, a mixed beverage permit, a private club registration permit, a retail dealers on-premise license, a brewers license, or a distillers and rectifiers permit (and who knew you need a permit to rectify?).

Whats interesting is that current state law prohibits holders of certain on-premises alcoholic beverage permits from selling lottery tickets. Moodys bill would erase that prohibition for this new game.

Several states have quick draw lottery games. From the New York Lottery: "The Quick Draw game is played every four minutes throughout the day and night, with the exception of a short break between 3:25 am. and 4 a.m."

Looks like what's called "quick draw" in HB 817 bill is what's called Keno (pronounced keen-o and not named for me) in some of the 21 states that have it as part of their lottery repertoire. This interesting tidbit was in a news story back when New York began its game in 1995: "New York State has launched a new Keno-style lottery game that gives bettors results every five minutes and faces a legal challenge from casino magnate Donald Trump."

"He said he was filing the suit not because he feared competition for his casinos, but rather because he felt strongly that the game, which he termed 'video crack,' would damage the state's social and economic fabric by luring people to gamble," The New York Times reported back then.

Trump lost. (Has this guy ever won a lawsuit?) And on the game's opening day, the Times reported that "critics ... say that the game's pace makes it more akin to casino-style gambling and more prone to pocket-draining abuse."

Moody's HB817 will be among several gambling-related measures in the 2021 legislative hopper. Casino gambling will be back for another push and could get a boost in a Legislature that'll be looking for money in the proverbial sofa cushions.

Moody, D-El Paso and an influential lawmaker now serving as House speaker pro tem, sees his proposal as "kind of the next step" for the Texas Lottery. "You're essentially bringing a currently regulated game to a new location that is also a regulated location," he said.

In other states, these kinds of games have pumped up lottery revenue by as much as 30%, Moody said. The Texas Lottery sold $6.7 billion worth of tickets in fiscal 2020. That meant $1.66 billion to the Foundation School Fund and $22.2 million to the state's Fund for Veterans Assistance.

Moody also sees quick draw lottery as economic development for an economic segment sorely in need of development.

"We have a very, very debilitated restaurant and bar industry in Texas," Moody said, "and as we emerge from the pandemic we should try to figure out new and better ways to to enhance what they can offer."

Would this be a gambling step too far and one too close to consumption of alcohol?

"I'd argue that currently you could walk into a convenience store, buy all the alcohol you want and as many scratch tickets as you want," Moody said. "Philosophically, I don't know the difference between one and the other."

"I wouldn't characterize this as an expansion in any significant way," he said. "This is a game we already have and just allowing it to be played in a different way."

Others will see it in a different way.

Its going to be an interesting session for gambling, with lawmakers also working on a version that's been around for awhile. Back in 1986, the Legislature OK'd parimutuel wagering on horse and dog racing. Voters approved it in 1987 amid projections of big bucks for the state.

It's been disappointing. And the 2021 Legislature is going to look at phasing out the Texas Racing Commission and putting the remaining tracks (horse only, the last dog track closed this year in La Marque) under another agency. The Texas Sunset Advisory Commission staff has recommended the Texas Department of Agriculture, but the full commission, which will make a legislative recommendation, postponed action on the agency earlier this month.

Interesting. The last time Texas lawmakers met, they took Agriculture Commissioner Sid Miller's name off of the gas pumps. Now they might put parimutuel wagering under his purview. FYI, as ag commissioner, Miller now sits as an ex-officio member of the appointed Texas Racing Commission.

The Sunset Advisory Commission staff report notes that when parimutuel betting was OK'd in Texas "the Legislative Budget Board estimated racing would contribute about $110 million annually to the state coffers ...However, the Texas racing industry has never been the economic driver originally envisioned. As racetrack attendance, race days and wagers have declined, so have the commissions revenue and ability to most effectively regulate racing in Texas.

Lauren Ames, the Sunset Advisory Commission project manager for the Texas Racing Commission, told the Sunset Advisory Commission in September that the Racing Commission "struggles to serve as an effective regulator while also managing the administrative work of a regulatory agency."

Chuck Trout, the Racing Commission's executive director, acknowledged to the Sunset Advisory Commission a "dynamic that has given the industry too much influence over our operations."

COVID-19 has made a bad situation much worse. The Sunset Advisory Commission staff report said, "The lack of revenue during the pandemic almost forced the (racing) commission to close in July 2020, jeopardizing the continued operation and regulation of the Texas racing industry."

Miller told the Sunset Advisory Commission in September that he'd "just sent a letter off to the (Legislative Budget Board) and the governor alerting them that because of lack of racing and that's where their fees are generated the Racing Commission is in perilous times, and you know they might not be able to keep the lights on until the Legislature comes in."

Miller told the Sunset Advisory Commission, "If the will of the Legislature is to send it to the Texas Department of Agriculture we'll do our very best to run it as efficiently as possible."

All in all, an interesting legislative session coming up on the gambling front. You can bet on it.

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Herman: The plan to dip into Texans' pockets by combining gambling and alcohol - Austin American-Statesman