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Testimony Regarding Casino Resort Gambling in Texas

Testimony of Tom Giovanetti
President, Institute for Policy Innovation 

Before the House Committee on State Affairs
Regarding HJR 155 & HB 2843
Wednesday, March 22, 2023


 Mr. Chairman, and Members of the Committee

My name is Tom Giovanetti, and I am the president of the Institute for Policy Innovation, a 35-year-old conservative, free market public policy think tank based in Dallas. 

I appreciate the opportunity to share our thoughts on the joint resolution and bill before you today. I have provided you with copies of my testimony as well as copies of an op/ed by me that was published in the Fort Worth Star Telegram last week. 

Most of the members of this committee, and most of the members of this legislature, would say that they believe in limited government, individual liberty, and individual responsibility. Those are my principles as well, and those are the principles of the Institute for Policy Innovation, and those principles are why people like me vote for people like you! 

In a limited government, individual liberty and individual responsibility regime, government does not pre-emptively regulate unless there has been demonstrated harm, and government does not prohibit people from engaging in activities of their choice unless it harms someone else. This liberty approach is the approach originally designed into the US Constitution, and it’s also the approach most Texans think guides Texas policymaking. 

Unfortunately, you and I know different. You and I both know that there are any number of areas in which Texas law regulates things that don’t need regulating, protects certain entrenched business interests against competition, protects specific business models against innovation, and prohibits activities that are perfectly legal in our neighboring states. Texas’ prohibition against casino gambling violates the principles of limited government, individual liberty, and individual responsibility. 

Drive a few hundred feet north of the Texas border, or east, or south for that matter, and you will find out very quickly that many Texans patronize casinos. But Texas prohibits casinos within its borders as a result of the very predictable bootleggers and Baptists coalition. In this case the bootleggers are illegal gambling operations, bookies and illegal betting parlors, and the Baptists are the moralizers who don’t realize they are being used by the bootleggers. Texans gamble in casinos, and everyone profits from it except for Texas and Texans. 

In a state where the majority believes in limited government, free markets, individual liberty and individual responsibility, there is no legitimate policy argument for continuing the prohibition against casino gambling in Texas. 

However, this can be done in a way that is very wrong or very right, and as usual the devil is in the details. First, the primary opportunity for corruption lies in the issuing of licenses. We have to do this right in Texas, and that means awarding licenses in a manner that is fair, competitive, open and transparent. No background deals to the party that makes the biggest campaign contributions or that gives away the most junkets. Texas can do this right and be an example to other states. 

Second, and related to the first, is that local communities must be involved in deciding whether or not a casino operates in their community, and if so, the community must be involved in the negotiations and choice of partners. It can’t only be handled at the state level. Community involvement will be critical to establishing a Texas model that maximizes liberty and opportunity while respecting local standards and preferences. Something along the lines of the old municipal cable franchise model might inspire something like a regime of local choice and local option for casinos. 

Unfortunately, the bill before you does not pass either of these tests, which puts me in the position of supporting the goal of legalizing casino gambling but opposing provisions of this bill. The bill before you predetermines winners and losers at the state level, is not open, transparent and competitive, restricts entry, and does not allow for sufficient community involvement. This is simply not the way to do it. 

We at the Institute for Policy Innovation would be delighted to work with this committee to find ways to allow individuals the liberty to patronize casinos right here in Texas while still preserving Texas values and community involvement. But as this bill is drafted, we cannot recommend it moving out of committee as-is. 

Thank you for your attention, and I’m happy to take questions if there are any.