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Wednesday, March 3, 2021

The late Sheldon Adelson’s gambling empire pushes forward with goal to bring casinos to Texas

by Patrick Svitek, The Texas Tribune.

The gambling empire Las Vegas Sands is pressing forward with its ambitious drive to bring casinos to Texas after a series of recent developments, including the death of its CEO, Republican megadonor Sheldon Adelson, have called into question how much momentum remain behind the cause.

The company made waves in Austin late last year as it built a high-powered lobby team and made clear it saw Texas as its next big expansion opportunity — “the biggest plum still waiting” in the industry. But since then, Comptroller Glenn Hegar released a fiscal forecast for the state that was much better than expected, quieting what had been mounting conversations about how gambling could be a new tax revenue source for the state. Then came the death of Adelson, the famous chairman, founder and CEO of Las Vegas Sands. And then the new state House speaker, Dade Phelan, delivered his first public assessment of the push, saying casinos needed to be treated as a “long-term commitment” and not a short-term panacea for the state’s fiscal challenges.

The company has not pitched casinos as a silver bullet for Texas’ budget problems, but few dispute that the company is operating in a different environment in Texas now than it was as recently as a month ago.

Andy Abboud, Las Vegas Sands’ senior vice president of government affairs, indicated in a statement for this story that the company was undeterred.

“The possibilities for expanding Texas’ tourism offerings are exciting and we look forward to working with lawmakers this session to present the potential opportunities that exist for robust, long-term economic development and jobs for the state,” Abboud said.

Sure enough, Las Vegas Sands’ Texas lobby team has kept growing at a brisk pace, ballooning to 51 members, according to registrations with the Texas Ethics Commission as of Tuesday. The company is spending anywhere from $2.3 million to $4.5 million on the lobby stable, according to the state records, which only provide pay ranges for individual lobbyists.

The company continues to bring on influential names like John Colyandro, a former senior adviser to Gov. Greg Abbott, and recently added a notable Democratic player in Leticia Van de Putte, the former state senator from San Antonio and 2014 nominee for lieutenant governor.

Earlier this month, the week before the session started, the company’s Texas lobbyists were invited to its flagship Venetian Resort in Las Vegas for a three-day retreat.

The following Monday, Hegar delivered the news: The state was facing a nearly $1 billion budget shortfall, much less than the $4.6 billion deficit he projected last summer. He estimated lawmakers would have $112.5 billion available to allocate for general-purpose spending over the next biennium, down slightly from the current budget but notably higher than his summer expectations.

“Of course any immediacy [around casinos] is gone because the comptroller gave an improved outlook what the economy will do for revenue,” said Eva DeLuna Castro, a budget expert at Every Texan, a left-leaning Austin think tank.

The next day, as lawmakers headed to Austin for the opening day of the session, Las Vegas Sands announced the death of Adelson, 87, from complications related to treatment for non-Hodgkin’s lymphoma. Adelson was one of the most prolific donors in GOP politics, and among his final donations was a half-million dollars to Abbott late last fall.

Abbott swiftly memorialized Adelson, issuing a statement calling him a “remarkable American whose legendary business savvy and determination helped him rise from humble beginnings to a titan of his trade.”

That first week of the session also saw Phelan make his first media appearances as speaker — and make known his view on new revenue sources such as casino gambling and marijuana.

“It gets brought up in every conversation, and if you want to discuss those two as revenue sources, do it through the prism of a long-term commitment because it will not fix the current budget deficit or the ’22-’23 budget issues we have,” Phelan said during an interview with Texas Tribune CEO Evan Smith. “It will take years before you see any revenue from either one of those options. To think you can plug and play on either one of those, it’s not factual. It won’t work in this current budget cycle.”

While not exactly a ringing endorsement of casino gambling, Phelan’s view may not be too out of whack with Las Vegas Sands’ pitch. During a talk last month to the pro-business Texas Taxpayers and Research Association, Abboud warned Texans against thinking about casinos as a cure-all for all the state’s budget challenges and described the yearslong timeline that they would require.

“All that will happen in the Legislature this next session is for the state Legislature to put it on the ballot and to let voters decide,” Abboud said. “And then business leaders and community groups and the policymakers need to get involved in the process and make sure that this is done the right way.”

TTARA’s president, Dale Craymer, said it was always going to be a stretch for casinos to be part of a short-term budget fix given the “long lead time to get them up and running and generating revenue.” For that reason, Craymer added, “ultimately gambling may be a part of the budget solution — just it may be a part of tomorrow’s solution rather than today’s.”

“It probably makes it a tougher vote for some legislators given the way the numbers [from Hegar] panned out, but it’s not just a revenue issue in all honesty,” Craymer said. “It’s also an economic issue. We think about casinos for the potential tax money they bring, but they always bring substantial investment, substantial tourism and substantial employment.”

Texas currently has some of the strictest gambling laws in the country, but there are a few exceptions where the practice is allowed, such as bingo, the state lottery, and at horse or greyhound dog races. Through court decisions and legislation in the 1980s, three federally recognized Native American tribes operate casinos with limited games — in Eagle Pass, El Paso and Livingston.

Past efforts to expand gaming haven’t made it far. In 2015, Abbott said he “wholeheartedly” supported Texas’ gaming restrictions while ordering state lottery officials to stop exploring sports betting games. In 2019, a bill by state Rep. Joe Deshotel, D-Beaumont, ran into opposition from groups like the socially conservative Texas Values and the Texas Baptists Christian Life Commission.

As the session got underway earlier this month, even more was revealed about the extent of Las Vegas Sands’ influence campaign in the state. Campaign finance reports that were due Jan. 15 showed that Adelson gave $500,000 to Abbott in late October, making the casino mogul Abbott’s second largest donor for the reporting period, which covered the second half of 2020.

The latest reports also showed that Adelson gave $25,000 to Phelan after he became the presumptive House speaker late last year.

Disclosure: Every Texan and Texas Taxpayers and Research Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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