Former Texas Governor’s Sports Betting Estimates Contain Hyperbole, Say Experts

Posted on: December 28, 2022, 03:45h. 

Last updated on: December 28, 2022, 04:22h.

Former Gov. Rick Perry (R) is overtly bullish on the idea of his state embracing mobile sports betting.  But some experts believe his projections are more hyperbole than reality.

texas sports betting
Former Texas Gov. Rick Perry (R). Some experts question his sports betting estimates for the state. (Image: New York Times)

Though he’s not an avid bettor, Perry has skin in the game. The former Secretary of Energy is a paid spokesman for the Sports Betting Alliance — a group comprised of professional sports franchises in Texas and gaming companies. He estimates that last year, Texans waged $8.7 billion on sports through illicit avenues, namely offshore websites and local bookies.

Even if that number is accurate, it doesn’t necessarily mean it will linearly translate to legal wagering venues if Texas approves mobile sports betting. Some industry experts doubt the credibility of that figure.

Given the high level of uncertainty in this approach, this estimate should be treated as low-confidence,” according to a recent report from research firm Eilers & Krejcik Gaming.

Eilers & Krejcik added that Perry’s $8.7 billion estimate of illegal sports wagering in Texas is a“highly speculative exercise,” which makes sense. That’s because offshore sportsbooks and local bookmakers aren’t reporting data to state regulators.

Texas Sports Betting Would Be Big, But How Big?

In an interview with the Dallas Morning News, Cara Gustafson, a spokeswoman for the Sports Betting Alliance, noted that there’s undoubtedly an “extensive” illegal sports wagering market operating in Texas. Perry added the dollar figure of that activity is “substantial” without getting into specifics.

Projecting what the economics of sports betting will look like in Texas is somewhat difficult. That’s because California and Florida, the largest and third-largest states respectively, don’t permit mobile betting. The most relevant comparison is New York — the fourth-largest state.

Mobile betting in New York is nearly one year old and generated a handle of $13.3 billion, and revenue for operators of $1.1 billion as of November. That created $561.5 million in tax receipts for state coffers.

New York has the highest sports betting tax rate in the US — one unlikely to be copied in Texas — so the $561.5 million likely isn’t relevant in the Lone Star State. Likewise, New York’s $13.3 billion handle isn’t transferrable to Texas because the latter’s population is 40% larger than the former’s.

In theory, that implies Texas’s handle would be significantly larger. But it remains to be seen if sports wagering there is part of everyday cultural norms, as it is in New York and neighboring states.

Another issue is that estimating the exact amount of illegal sports wagers placed in the US is arguably a futile endeavor. While Eilers & Krejcik say the number could be around $100 billion, other experts argue all forecasts to that effect are essentially worthless due to the lack of reliable data.

Texas Sports Betting Outlook

For his part, Perry is clear in saying that while he supports Texas approving mobile sports betting, he’s not in favor of broader gaming expansion, including the addition of casino resorts.

Republican Gov. Greg Abbott, who easily won reelection last month, recently signaled he’s more open to casinos than previously speculated, and he’s softened his stance on sports betting.

Ahead of the 2023 legislative session, there are pre-filed bills for sports betting and casinos. But previous related efforts in the state stalled.


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