Kauffman Stadium

The Genesis of Missouri Lawmaker’s New Spin on Sports Betting ‘Integrity Fee’

Missouri state senator Denny Hoskins (D-District 21) isn’t opposed to a sports betting “integrity fee” — an off-the-top cut of all wagers. He’s just not willing to give it to the professional leagues.

Hoskins said it’s not unusual for owners of professional sports teams to go to their local and state governments and ask for money to build a stadium or make upgrades. So, instead of giving money to the leagues directly, Hoskins wants to keep the money in Missouri’s hands to resolve how to make the state’s venues better.

“It’s an idea that I started thinking about because if there is an integrity fee it would go to the professional leagues and if there is not an integrity fee, that money would go to the casinos,” Hoskins told Sports Handle in a phone interview Friday. “So I thought, what if we put the integrity fee into a fund, because whether it’s the Scottrade Center or Arrowhead Stadium or the Edward Jones Dome …  they don’t only need money to upgrade the actual facilities, but to upgrade the fan experience. Whether they need better intersections or lighting, or I’ve never heard of a stadium that says ‘yes, we have too many women’s bathrooms.’ The goal would be to upgrade either in the stadium or even outside of it.”

To that end, Hoskins filed a new sports betting bill on Saturday, the first day that Missouri lawmakers could do so ahead of the 2019 session. His bill turns the integrity fee on its head and keeps more money at home by creating “Entertainment Facilities Infrastructure Fund.”

The bill calls for a a fee of 0.5 percent of gross dollars wagered — in other words, on the betting handle — to go into this fund. In addition, the bill calls for a total 14 percent tax on sports betting, a 12 percent state tax and a two percent administrative fee. He believes the idea would give the professional leagues at least a little bit of what they want by having money available to upgrade stadiums.

“We get asked all the time — and even when we don’t get asked — some sort of new sports facility gets built and its assumed that the city or the state (will fund it),” Hoskins said. “So, I was trying to think outside the box, and with the amount of money that we spend (on venues) I was trying to think of a way to better the fan experience or game.”

Hoskins and his colleagues certainly get asked to help finance projects and venues separate from sports leagues, too. The way Hoskins’ new bill is written, ostensibly other groups and construction projects unrelated to sports would also benefit. The fund could be used for “the construction and maintenance of entertainment facilities, field houses, cultural facilities, convention centers, recreational facilities and more,” as described in the act. In other words, not strictly billion-dollar stadiums.

All the Teams in Town, and One Vacant Stadium

St. Louis and Kansas City, Missouri’s two biggest cities are home to six professional sports teams — two Major League Baseball teams (St. Louis Cardinals, Kansas City Royals), two Major League Soccer teams (St. Louis FC, Sporting KC), one NFL team (Kansas City Chiefs) and one NHL team (St. Louis Blues). Each has their own stadium, and since the Rams left St. Louis for Los Angeles two years ago, the state is saddled with the The Dome at America’s Center (formerly the Edward Jones Dome), a nearly 67,000-seat domed stadium in the heart of St. Louis. The Dome now lacks a permanent tenant and is used as convention space and and hosts concerts or other one-off events.

What will happen to the dome is anyone’s guess — the Pontiac Silverdome in suburban Detroit was abandoned by first by its NBA team and later its NFL team, and last December was imploded.

Hoskins said the fate of the dome is the “million dollar question” in Missouri. His rejiggered “integrity fee,” though, could help to keep it in good condition while the city and state explore new uses for it.

When he first considered this idea, Hoskins said, he thought the fee could be rolled into the tax. But he later discovered that gaming tax revenue is largely earmarked for education, so this version of an “integrity fee” is now separate.

Hoskins isn’t naive and understands that he’s likely to get some pushback on his new idea. After all, the professional leagues have been lobbying across the country for some kind of cut of sports betting revenue while casinos and sports betting operators have been adamantly opposed to any additional fees. No state with legal sports betting pays the professional leagues any fee or has mandated that licensees purchase data from leagues for their sportsbooks.

“For the casinos, it would be ideal to have no tax on any of the sports betting,” Hoskins said. “So I would think that they would not be in favor of this.”

But the fee is a negotiating point. All legislation is subject to change as it moves through state governing bodies. So Hoskins’ new idea is just one more piece of the legal sports betting puzzle that’s up for discussion.

“(I’d say to the casinos), we’re willing to work with you on (legal sports betting), but you are going to have to make some concessions, we’re not just going to open it up to help casinos in Missouri increase their bottom line,” he said. “Missouri is going to have some skin in the game, as well. So, we might say, then let’s take a look at the tax rate.”

For now, though, Hoskins will wait and see how his new idea is received. And he’ll wait to see what other bills are filed in his state. Representative Dean Plocher (R-District 89), who has gone on record as saying he would consider paying the leagues a fee, has promised new sports betting legislation. And last year, four lawmakers proposed sports betting legislation, so there could also be new bills from other quarters.

“It’s a long session, and hopefully we’ll get something passed this time,” Hoskins said.

The Missouri General Assembly opens its 2019 session on Jan. 9 and it runs through May 17.