The newly ascendant gaming lobby will have their day in committee on Tuesday, with a dozen bills designed to expand the industry’s scope and footprint. Many supporters will make happy-talk about generating revenue to fund big-government. The only question is whether cash-craving lawmakers will take the bet.

The House’s Licensing & Administrative Procedures Committee will kick off at 8 a.m.

There is no doubt that allowing the gambling industry to expand its footprint will mean more activity, but the belief that it will mean more net revenue for the state is a stretch. One economist has said that for every dollar a state gets in gambling revenues, it spends three in new expenses. Those come in the form of regulatory costs, law enforcement and social services.

I expect Tuesday’s gambling expansion hearing will include constant promises of all the dollars that can be used “for the children” to “fund education” and promote “more spending” on health care. Don’t believe it for a minute. Such promises are vacuous. (Remember how the Lottery was going to fund education? It funds about three days of operating expenses, when the ticket sales can pay off the jackpot.)

The states with the larger gambling footprints than Texas are generally having worse budget times. That’s partially because they have counted on gaming to shoulder the burden for bigger and bigger government spending. Consider the fiscal mess Nevada, gambling’s marquee state, has had. Or New Jersey. Or Illinois…

For example, Nevada has a 14.5% unemployment rate, compared with Texas’ 8.3%.

None of the proposals do much to expand economic liberty, even while draped in the language of the free market. The barriers to entry are virtually insurmountable to all but the entrenched gambling providers. More crony capitalism is created, not less, as businesses must get permission to operate from the state in tightly controlled locales designed only to add friends and political allies, not let market competition work.

When it comes to the politics of gambling, Republicans – and especially conservatives – might want to carefully consider who they would be enriching. The gambling lobby, and especially the industry’s “Texas for Economic Development” political action committee, has spent heavily against conservative candidates and incumbents. Expanding gambling will be a reward for campaign contributions against conservatives, reinforcing the practice. It’s also likely increase the size of future contributions.

The “save the budget with gambling” battle cry makes all sorts of wild-eyed assumptions, not the least of which is that Texans would approve any expansion at the ballot box in November. That means legislators who pass gambling as an excuse to spend more money, may be gambling the state into worse fiscal straights. If they do something as reckless as pass gambling expansion, lawmakers would best serve Texans by keeping forecasted dollars out of the 2012-2013 spending equation.

As Kenny Rogers sang, “’Cause ev’ry hand’s a winner and ev’ry hand’s a loser, and the best that you can hope for is to die in your sleep.”

Now that’s a cheery budgeting thought… But probably not bad for expectation-setting.



Michael Quinn Sullivan

A graduate of Texas A&M, former newspaper reporter, one-time Capitol Hill staffer, think tank vice president, and an Eagle Scout, Michael Quinn Sullivan and his wife have three children. He is the publisher of Texas Scorecard. Check out his podcast, “Reflections on Life and Liberty.”

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