As the new Texas legislative
session is about to begin, efforts to bring video lottery terminals
(VLTs) to Texas race tracks are mounting. Coalitions of race track
promoters and horse people throughout the state are joining forces to
convince the legislators in the upcoming session to pass a
Constitutional Amendment that will then allow Texas voters to vote yea
or nay on the issue.
The major issues of debate focus on the actual
amount of revenue the state will receive from VLTs, how the economy and
tourist trade will be stimulated by this new gambling venue, and the
effects of increasing gambling in the state.
Proponents of VLTs have persuasive statistics to
back their claims of increased state revenue, economy stimulation, as
well as growth and support for the agri-business horse industry and
tourist industry. Further, a special fund will receive a significant
portion of net proceeds which will directly stimulate the entire horse
industry from racing to recreational activities and youth programs.
Statistics over the past 10 years show that Texas
has lost half its racing stock broodmares and stallions. Breeders have
gone to Oklahoma and Louisiana where native born incentive programs are
much more lucrative. The trickle down effect of this population change
is felt throughout by veterinarians, farriers, feed store owners,
training and boarding facilities, equipment suppliers and more.
Further, the decrease in race events due to the much
smaller purse and prize offerings impacts the hospitality industry
(restaurants, hotels, retail shopping). The multiplier effect of
increasing the horse population and expanding gambling activity would
boost many businesses in a variety of industries and create an untold
number of jobs throughout the state.
According to Valerie Clark, Executive Director of Texas H.O.R.S.E. (texashorseweb.com
“Texas HORSE has developed the PERFORMANCE HORSE DEVELOPMENT FUND
(PHDF) which gives a financial boost to national horse organizations
located in Texas. These associations will be able to use funds
innovatively to grow the Texas events and programs that they currently
oversee as well as create new areas of growth.”
“A portion of the PHDF is set aside for horse
activities that do not fall under the umbrella of the state or national
organizations: 4-H and FFA programs & activities;
rehabilitative riding programs; educational seminars and clinics about
horses & horsemanship; equine research, etc. The goal of the PHDF
is to give something back to the entire Texas horse industry,” Clark
Opponents of VLTs center most arguments around the
moral dilemma of the expansion of gambling in the state. VLTs are
viewed as more insidious than track wagering. Opponents believe there
are sufficient means for any person to gamble in Texas; a new venue is
It is claimed VLTs are addictive and prey on the
poor and elderly. Social costs increase in the form of crime, debt,
family violence, and suicide. Studies have not been conducted to
accurately assess these costs to society.
Introducing VLTs into Texas is viewed as a
significant expansion and a step toward full scale gambling such as
seen in Nevada and Louisiana. Opponents feel that it is immoral for the
state to obtain financial support via expanded gambling.
Proponents counter these claims by showing that the
social costs of gambling already exist in Texas from other forms of
gambling. Pathological gambling is rare, affecting between 1 and 5
percent of the population. Texas already receives revenue from other
potentially harmful activities and substances and VLTs are no
Casino type gamblers come from income groups above
the national median and are more likely to hold white collar jobs. Some
studies show that social costs, crime, and illegal gaming are reduced
after legal gambling is introduced.
In an earlier study, the state comptroller estimated
that more than $1 billion per year is lost to neighboring states as
Texans travel to Oklahoma, New Mexico, and Louisiana to more attractive
gambling venues. The horse industry has had significant losses from
breeders and training facilities moving out of state to take advantage
of better incentive programs and race purses.
State revenue from VLTs would be the same as the
state receives from racetrack betting and the lottery. A percentage fee
is taken from each wager, so the revenue is much the same as the excise
tax on alcohol and cigarettes. This type of revenue stream may well
bridge the gap of the upcoming budget deficit without raising taxes.
According to the state comptroller, income from VLTs
may potentially provide Texas with an ongoing revenue stream around $1
billion annually. This estimate is based on the percentage take from
betting, taxes on increased economic activity, and accounts for
possible revenue losses as money is shifted from other taxable
spending. Studies indicate that the social costs of gambling do not
exceed the economic benefits of gambling.
Legislative goals that Texas HORSE supports can be found at: texashorseweb.com.
The legislative process for a VLT bill must first gain a two thirds
vote in the House and Senate for a Constitutional Amendment to allow
the voters to decide on the issue in November 2011. Voters will want to
ensure their votes for state congress this November reflect their
positions on this matter.
are games of chance played on electronic terminals much like slot
machines. VLTs, however, are monitored, controlled, and audited by the
state lottery agencies. Slot machines are monitored by other state
agencies and may not be centrally controlled.
VLTs take money or credits in return for a play at
the game. Players can win cash, prizes, or use their winnings to play
more games. Wagers range between 5 cents to $10 per play.
The payback to players for VLTs is about 90%. The
other 10% is profit that is split between the state and the operators
of the VLT machines and venues. Texas state would receive about 30% of
this net income from every machine.
The current proposal would place VLTs at horse and
dog race tracks throughout Texas. VLTs, track betting, and lotteries
are all varieties of pari-mutuel wagering. The machines provide a new
way to gamble, but would be located where gambling is already operating
and approved by voters.