| TO: | Honorable Mike Hamilton, Chair, House Committee on Licensing & Administrative Procedures |
| FROM: | John S O'Brien, Director, Legislative Budget Board |
| IN RE: | HB3575 by Thompson (Relating to the operation of casino gaming in this state by federally recognized Indian tribes on certain land; providing penalties.), As Introduced |
The bill would allow casino gaming by federally recognized Indian tribes on, or within five miles of, their tribal lands as of January 1, 2011. In consideration of the exclusivity of gaming that the bill would provide, federally recognized tribes may enter into a gaming compact with the state to allow casino games and pay the state no less than eight percent of its gross gaming revenues. If the state allowed video lottery terminals in the future within 70 miles of a tribe's lands, the tribe could cease these payments. The state lottery commission would have the authority to conduct investigations of casino gaming operations and would be required to adopt rules for casino gaming no later than December 31, 2011.
The bill does not require Indian tribes to enter a gaming compact with the state but codifies limitations for a compact if one is negotiated. The bill would require that the gross gaming revenue payments be made to the state comptroller in part IX of subchapter D and provides some tribal input on how the money would be use locally, but in subchapter E, it would require that this eight percent be paid to the lottery commission to be placed in the state casino gaming account.
In a hypothetical case in which all federally recognized Indian tribes would enter a compact and pay the state eight percent of gross gaming revenues, the state could increase general revenue by about $40 million per year by 2016 and thereafter, with a loss of up to $8 million to the state and local revenue from the traditional lottery and bingo.
The bill includes unpredictable elements that do not allow a reliable revenue estimate. It does not require Indian gaming by all tribes, does not set a time-line for their casino gaming operations, and allows that the state's share of revenue from Indian casino gaming would be relinquished if the state authorized comparable gaming activity within 70 miles of the tribal lands. Also, the Texas Attorney General Opinion GA-0278, dated December 9, 2004, casts doubt on the state's authority to collect gaming revenues from Indian tribes on the basis of state law alone. The amount of state and local revenue that would materialize, if any, cannot be estimated.
The Department of Public Safety indicates they would require additional employees to conduct criminal history checks and background investigations, as well as to enforce, inspect, and monitor the casinos.
The bill would take effect on December 15, 2011, if the constitutional amendment to allow Indian casino gaming is approved by the voters.
| Source Agencies: | 304 Comptroller of Public Accounts, 362 Texas Lottery Commission, 405 Department of Public Safety
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| LBB Staff: | AG, JOB, SD
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