TO: | Honorable Mike Hamilton, Chair, House Committee on Licensing & Administrative Procedures |
FROM: | John S O'Brien, Director, Legislative Budget Board |
IN RE: | HB2111 by Woolley (Relating to the operation of video lottery games by licensed horse and greyhound racetrack operators, to a defense for the operation of video lottery by Indian tribes, to the authority of the Texas Lottery Commission and the Texas Racing Commission, and to the conduct of gambling in this state; providing penalties.), As Introduced |
Estimated Two-year Net Impact to General Revenue Related Funds for HB2111, As Introduced: a negative impact of ($46,117,400) through the biennium ending August 31, 2013.
However, the positive all funds impact would be $284.3 million in fiscal year 2012 growing to $713.4 million in fiscal year 2016.
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2012 | ($6,721,200) |
2013 | ($39,396,200) |
2014 | ($58,078,200) |
2015 | ($89,728,200) |
2016 | ($104,360,200) |
Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
Probable Savings/(Cost) from Foundation School Fund 193 |
Probable Savings/(Cost) from New GR-Dedicated - State Video Lottery Account |
Probable Revenue Gain/(Loss) from New GR-Dedicated - State Video Lottery Account |
---|---|---|---|---|
2012 | ($382,200) | ($6,339,000) | $0 | $271,391,000 |
2013 | ($3,279,200) | ($36,117,000) | ($6,084,832) | $276,792,000 |
2014 | ($4,989,200) | ($53,089,000) | ($14,938,208) | $436,060,000 |
2015 | ($7,920,200) | ($81,808,000) | ($24,463,722) | $700,841,000 |
2016 | ($9,384,200) | ($94,976,000) | ($34,547,320) | $824,032,000 |
Fiscal Year | Probable Savings/(Cost) from Lottery Acct 5025 |
Probable Revenue Gain/(Loss) from Lottery Acct 5025 |
Probable Revenue Gain/(Loss) from Texas Racing Comm Acct 597 |
Probable Revenue Gain/(Loss) from Criminal Justice Plan Ac 421 |
---|---|---|---|---|
2012 | ($858,400) | $664,000 | $10,000,000 | $10,000,000 |
2013 | ($138,006) | $2,962,000 | $10,000,000 | $10,000,000 |
2014 | $996,406 | $4,553,000 | $10,000,000 | $10,000,000 |
2015 | $0 | $7,201,000 | $10,000,000 | $10,000,000 |
2016 | $0 | $8,433,000 | $10,000,000 | $10,000,000 |
Fiscal Year | Probable Savings/(Cost) from State Highway Fund 6 |
Change in Number of State Employees from FY 2011 |
---|---|---|
2012 | ($207,370) | 22.3 |
2013 | ($173,084) | 22.3 |
2014 | ($173,084) | 22.3 |
2015 | ($177,038) | 22.3 |
2016 | ($190,579) | 22.3 |
The analysis is based on net terminal income, estimated numbers of video lottery terminals, and ramp-up time, based on surveys and the experience in other states. The estimate includes money for administrative costs from net terminal income, which are shown in the fiscal impact as a gain to the TLC's budget. A $5 million loan from the State Lottery Account to be repaid by the State Video Lottery Account is internal to the TLC and is revenue neutral to the state. GR Account—State Video Lottery was also reduced by the amounts the bill would provide to the TRC's Compulsive Gambling program, the Governor's Criminal Justice Planning Account, and the start-up costs from the state lottery account. Revenue shown in fiscal 2012 and credited to the new State Video Lottery Account is from application fees due by September 1, 2011($225,000,000), with an assumption that operating tracks would each apply for a video lottery license by that date, and some machine revenue as implementation is assumed to have started. Application fees for retailers and managers would be retained by the TLC to cover the expenses of the application process.
Competition for gaming dollars would have a negative impact on the traditional state lottery and bingo. The fiscal impact tables assume that all licensed racetracks would eventually operate video lottery terminals. Because of Attorney General opinion GA-0278, dated December 9, 2004, no net terminal income is assumed to come to the state from Indian tribes, but that tribal video lottery operations would provide competition to the racetrack video lottery operations. Although gaming losses affect sales tax receipts negatively, the repatriation of state gaming money currently going out of state, in addition to increased construction and economic activity would cause this bill to have a net positive effect on state sales tax revenues.
The Texas Lottery Commisssion would require an additional 20 FTEs to implement the provisions in the bill.
The Department of Public Safety would require an additional 2.3 FTEs to train and fingerprint employees. Applicant fees for fingerprinting would result in a revenue gain of $227,800 to General Revenue in each fiscal year.
In accordance with Government Code 321.013, all additional duties and responsibilities prescribed by the bill would be evaluated for inclusion in the SAO’s annual audit plan for Legislative Audit Committee approval.
This legislation would create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
Source Agencies: | 304 Comptroller of Public Accounts, 308 State Auditor's Office, 362 Texas Lottery Commission, 405 Department of Public Safety, 476 Racing Commission
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LBB Staff: | AG, JOB, SD
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