A bill to legalize sports wagering are heading to the Missouri House floor after passing out of the House Special Committee on Public Policy on a 4-2 vote. The Senate Appropriations Committee also is considering three sports betting measures.
House fiscal notes on the bill indicate Missourians would wager $150 million a year on sports, producing tax revenue of $13 million to $15 million annually; $1.3 million would go to the 13 casino host cities and the rest to education. But cities and counties without a casino would get zero.
State Rep. Scott Cupps, chairman of the House Special Committee on Public Policy, said, “There are a lot of people who are going to make a lot of money off this and none of that money, in this current bill’s form, goes back to where the people live.” Cupps said among options being considered are a 1-cent per-bet fee, or $1 per-day, to be distributed depending on where the bet is made. Without a casino in his district, Cupps said, “We’re not saying we want a piece of the pie, we are just saying we want some crumbs.”
The House bill and two of the Senate bills, backed by most casino operators and major professional sports teams, offer many of the same provisions. Both on-site and online wagering would be allowed. Casinos can have three skins and casino operators can have six, such as Penn National and Caesar’s Entertainment, which both have three casinos in Missouri. This set-up would allow one skin for each of the six major Missouri-based sports teams–Kansas City Chiefs, St. Louis Cardinals, Kansas City Royals, St. Louis Blues, St. Louis City soccer club and the Kansas City Current women’s professional soccer team.
At a hearing, Cardinals President Bill DeWitt III said, “All the pro sports teams in Missouri support sports wagering as a way to increase engagement with our fans and provide a fun and exciting new way to enjoy sports and our teams, which are such ingrained members of our communities. We also know that sports wagering will generate a significant source of tax revenue for Missouri.”
Each sports team would have a “designated sports district” for 400 yards around its stadium, limited to advertising from the team’s chosen platforms. DeWitt explained this would “allow the teams to prohibit the kind of obnoxious and ambush marketing that could otherwise occur as our fans enter stadiums and arenas with their families.”
The bills also specify Tier One wagers on the final score or result and Tier Two bets on any other type of wager, such as the total points, player statistics or a potential event like a home run or interception.
In addition, the bills require using official league data for settling Tier Two bets. DeWitt noted, “This is a very important issue to the teams because we want to make sure that if fans are betting on our games, we can control the accuracy and timing of data so that some unauthorized data sources can’t game the system.”
Ryan Soultz, vice president of government affairs at Boyd Gaming, operators of Ameristar Casino in Kansas City and St. Charles and the only casino operator opposed to industry backed bills, said the use of only league data to determine the outcome of Tier Two bets is too limiting and has only one purpose: money. “I can tell you I understand why the leagues want to require official data. It’s a revenue source. You want to have a robust array of data feeds that come in so you can see discrepancies when you set those lines,” Soultz said.
Platform operators also would be required to publish the points spreads, lines and odds for the various bets offered, and set the minimum and maximum bets allowed to bettors.
A Senate bill, sponsored by state Senator Denny Hoskins, is similar to the House bill but has a higher tax rate. Hoskins’ bill would require casino operators to pay a 21 percent tax rate, which generated $326 million in revenue during fiscal 2021. It also would allow the Missouri Lottery to set up terminals for parlay bets. Casino operators oppose the higher tax and the lottery’s role, but Hoskins said, “I am concerned with making sure whatever bill comes out is best for Missouri taxpayers.”
The House and Senate bills also differ regarding the promotional play deduction. Both would allow promotional activities, like free credits or prizes for new accounts, to be deducted. The House bill would provide 100 percent deductibility for sports betting operators in the first year, then phase out at 25 percent per year over four years. The Senate bills do not include phasing out the deductions.
Cupps said it makes sense to allow promotional costs to be deducted as legal sports betting is introduced, in order to attract players who may be using illegal off-shore platforms. Then, once sports betting is established, the deduction can be less generous. “We genuinely want to see something that is right for Missouri. We don’t care how it is done, we just want some equity there and make sure that the value for the state is right,” Cupps said.
Hoskins’ bill also addresses electronic gambling machines that have proliferated in gas stations, truck stops and bars. The measure would legalize video lottery games, generating $240 million a year in new tax revenue. At the same time, it would make electronic gambling machines illegal. “Unfortunately, these games are not regulated by the state,” Hoskins said.
Under the bill, any business allowing the use of any prohibited gaming terminal would face felony charges and a fine of $10,000. The measure also requires the machines to be placed in a separate room and connected to a centralized computer. The maximum bet would be $5 and no one under age 21 could play. The machines would be taxed at 36 percent.
One problem facing lawmakers is the state constitution only allows casino gambling within 1,000 feet of the main channels of the Missouri and Mississippi Rivers. But the sports wagering bills would require bets to be processed through a computer in a licensed casino instead of requiring bettors to travel to a casino. When Florida tried to allow the Seminole Tribe to operate sports betting statewide via servers on the reservation, a federal judge said it was a “fiction” that wagers were made at the casino.
However, Cupps believes Missouri courts will take a different view. “I am concerned that we are legalizing something that is going to be challenged in the courts. I do think they have crossed their t’s and dotted their i’s,” he said.
