The debate over whether to legalize sports betting in Missouri raged on Tuesday, as legislators and lobbyists spent about three hours discussing the potential benefits and drawbacks of the idea. Two Missouri House bills, HB 2502 and HB 2556, were the focal points of the discussions.
A third House bill aimed at legalizing sports betting in Missouri, HB 1666, was not discussed by the House Special Committee on Public Policy. Its meeting featured plenty of discussion and testimony for and against the bills, although no vote was taken. It’s unclear as to when the special committee may reconvene for a vote.
Professional sports teams in Missouri were among those speaking in support of sports betting legalization. A group made up of the MLB’s St. Louis Cardinals and Kansas City Royals, NHL’s St. Louis Blues, NFL’s Kansas City Chiefs, MLS’ St. Louis City Soccer Club, and the NWSL’s Kansas City Current announced previously their support of sports betting legislation. They were joined Tuesday by casino interests, including a representative from Penn National Gaming (Barstool Sportsbook), which owns three casinos in Missouri.
SCOOP: In Missouri, operators and pro teams agree to a framework for sports betting bills that would allow for statewide mobile, and skins for the teams.https://t.co/vXLHnR9dLI
— Sports Handle (@sports_handle) January 19, 2022
“First and foremost, 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 root for our teams, which are such ingrained members of our communities,” said St Louis Cardinals President Bill DeWitt III. “We also know that sports wagering will generate a significant new source of tax revenue for Missouri.”
A recent legislative estimate suggests Missouri could receive $15 million in annual tax revenue from legal sports wagering. The potential boost in state revenue was a common discussion point from supporters of the bills, who emphasized people in Missouri are already betting on sports, without the state or residents receiving any of the benefit from it in a legal, regulated market.
In addition to using illegal offshore sportsbooks or local bookies, Missourians are used to traveling across state lines to place sports wagers. Data from geoComply found that nearly 70,000 sports wagering attempts were blocked in Missouri over Super Bowl LVI weekend, as users tried to use mobile betting platforms that are legal in neighboring states. Recent GeoComply data also found that nearly 4 million geolocation transactions occurred within 10 miles of the Missouri border in Iowa, Illinois, and Tennessee in the past two months.
Potential roadblocks
The logistics of legalizing sports betting were hotly debated Tuesday, with one issue being the proposed tax on adjusted gross receipts. Each proposed bill includes a tax rate of 10%, which drew some pushback from legislators on the committee.
Long way to go on any Missouri sports betting proposal, but current concenus would open the door for 19 online sportsbook licenses (6 for pro teams, 13 for casinos) and a tax rate in line with industry average (ballpark of around 10%)
— Ryan Butler (@ButlerBets) February 22, 2022
Rep. Dottie Bailey, the special committee’s vice chair, wondered why neighboring state Illinois would have a 15% tax rate, but Missouri might have only a 10% rate. Bailey also inquired about imposing an admission fee for sports wagering, as Missouri retail casinos currently charge a $2 admission tax per patron.
Bailey suggested a higher tax rate and admission fee could produce more tax revenue for the state.
“Let me place a wager now — maybe we can close a deal right now,” Bailey said. “Let’s take it to 13% tax rate, and then we change the statute, the $2 admissions fee, raise it to $3, and put that on an inflation schedule and we can all go home. Any takers?”
Her idea was quickly shot down by bill proponents, especially the suggestion of charging a virtual admission fee for mobile wagers. In fairness, Bailey claimed her suggestion was in jest, but it was clear she felt the bill needs changes to satisfy state legislators focused on Missouri’s financial interests.
Other committee members worried about the potential influx of advertising that could come with legalized sports betting.
“I was driving through Indiana with some friends of mine a couple weeks ago, and we were bombarded so much by sportsbook billboards and signs,” said Rep. Scott Cupps, the special committee chairman. “Everywhere we went and everything we did, all there was was sportsbook ads … and so I can’t help but think that’s a discussion that we need to have when we’re working through this. Because I know there’s a lot of people who maybe don’t want their entire existence to be bombarded by sportsbook advertisement and promotion.”
Supporters of the bills said they believe an initial influx of marketing would eventually slow down as operators gained market share. Essentially, they suggested that while there might be heavy advertising when sportsbooks arrive in Missouri, the ads wouldn’t dominate the lives of Missourians, especially when taking a long-term view.
The extent of funding to address problem gambling in the state was another discussion point. Each bill calls for $250,000 to be allocated to problem gambling services, and some committee members seemed to think the number was low.
Boyd Gaming (a FanDuel partner) spoke against the bills for a different reason, citing concern over the required use — and potential cost — of official league data. That concern was questioned by Rep. Jason Chipman, who mentioned a provision in the bills that would allow a gaming operator to speak with the gaming commission about being allowed to use a cheaper, alternative data source.
The bottom line
Like previous years, there’s been a push for legal sports betting in Missouri. Tuesday’s discussion showed there’s still plenty of discussion ahead if sports wagering is going to be legalized.
Members of the Special Committee on Public Policy largely agreed that it was impressive for six major sports organizations and several casino representatives to come together in support of legislation. Still, the lawmakers spent Tuesday educating themselves on the pros and cons of sports wagering, and more discussions are needed for sports betting to become legal in the Show Me State.
