Two Missouri senators have pre-filed sports betting bills for the upcoming session beginning Jan. 8, 2020, and both would make Missouri the first state to pay a “royalty” on all legal sports bets to the professional sports leagues, as well as the NCAA. The bills would also make Missouri the third state after Tennessee and Illinois to mandate the use of “official league data.”
The bills were filed Dec. 1 and available online late last week. Senator Denny Hoskins and Senator Tony Luetkemeyer are the first two to throw out a framework for sports betting. There were similar bills in the Senate last year, but no sports betting bills made it out of committee.
On the House side, it’s likely that Representative Dan Shaul, chairman of an interim committee on gaming, will also file a bill. Shaul’s committee also released a report recently on the information it collected on sports betting. It’s unclear if his bill would follow the lead of Hoskins and Luetkemeyer with respect to paying sports leagues an off-the-top cut of wagers, dubbed a “royalty” by league lobbyists, formerly known as an “integrity fee.”
With regard to the two bills that have been filed, here’s a quick overview:
Missouri sports betting bills breakdown
Sponsor: Denny Hoskins
Tax rate on sports betting revenue: 9 percent
Royalty: 0.25 percent
Data mandate: Yes
Mobile: Yes, with remote registration
Application fee: $25,000
Annual administrative fee: $50,000 first year; $10,000 every five years
Mobile application fee: $25,000
Mobile administrative fee: $50,000/year
Regulator: Missouri Lottery Commission
Sponsor: Tony Leutkemeyer
Tax rate on sports betting revenue: 6.25 percent
Royalty: 0.75 percent
Data mandate: Yes
Mobile: Yes, with remote registration
Application fee: $10,000
Annual administrative fee: $5,000 per year plus $10,000 once every five years
Mobile application fee: $10,000/$5,000 renewal
Regulator: Missouri Gaming Commission
In both bills, it appears that mobile sports betting would have to be tethered to retail locations. While the tax rates are well within in the bounds of what operators consider manageable, tacking on a royalty, which is a percentage on total wagers (handle) rather than gross gaming revenue, that takes a big bite out of potential operator profits and state tax revenue. For example, the 0.75 percent royalty in Leutkemeyer’s bill could amount to roughy 15 percent of total revenue (assuming a 5 percent “hold”). The professional leagues initially began lobbying for a 1 percent fee right after PASPA fell, but have backed off that number and now are lobbying everywhere for 0.25 percent, which makes the 0.75 in SB 754 rather bizarre.
Missouri is home to four professional sports teams — the NFL Kansas City Chiefs, the MLB Kansas City Royals and St. Louis Cardinals, and the NHL St. Louis Blues. But no state that has legalized sports betting to date has imposed a “royalty,” and while two states have legalized with data mandates, and even that has not proven an easy sell in most states.
The Missouri General Assembly’s pre-filing period began on Dec. 1 and the 2020 session opens on Jan. 8.
