Casinos Proposed as Way to Subsidize Texas Wind Insurance

December 19, 2018

A Texas lawmaker has proposed subsidizing the state’s underfunded windstorm insurance and flooding assistance by building casinos in coastal counties.

State Rep. Joe Deshotel filed the bill on Dec. 7 to cover the cost of the Texas Insurance Agency by proposing to tax licensed casinos, Galveston County Daily News reported. The measure would give the Texas Lottery Commission the authority to issue six licenses to operate casinos across six counties.

The proposal would generate an 18 percent gaming tax of a casino’s revenue and use some of the money to ensure the windstorm association has sufficient capital to cover its insured deficits and operating expenditures.

Deshotel, who first filed a similar bill in 2015, said this latest iteration would send part of the tax to a flooding assistance trust fund. The governor’s office could then use the trust fund for emergency assistance during natural disasters like Hurricane Harvey.

“Just like the lottery, where a portion of funds go to public education, this is a need that’s underfunded,” Deshotel said. “If the lottery helps education, we can help with the problem of windstorm, which is disproportionately paid for by the coastal counties.”

Earlier this year, Gov. Greg Abbott blocked a proposal by the association’s board to raise commercial and residential rates by 10 percent.

Both Democrat and Republican members of the legislature have opposed legalized casinos over the years for a variety of reasons. Deshotel said he anticipated that opposition to continue in the next session.

“It’s something we should do regardless of whether the funds are dedicated to those issues,” he said. “Every bordering state to Texas has legalized gambling. We lose millions of dollars in potential tax revenue to those areas. We have the consequences of gambling, but none of the positives.”

The Texas Legislative Session begins on Jan. 8. The deadline to file bills is March 8.

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