Missouri lawmakers seem intent on charging licensed sportsbooks some sort of royalty or other fee above and beyond taxes, application fees and other administrative costs.
Representative Cody Smith (R-District 163) became the second lawmaker to pre-file sports betting legislation in Missouri that includes such a fee. And this one would include a full one percent of handle that some professional leagues have been lobbying for since earlier this year, despite leagues lowering their “request” in numerous states to one-quarter of one percent.
HB 119, which was obtained by Sports Handle last week, does have a little bit of a twist – the fee would be broken into two parts, a three-quarters of one percent fee that would be paid to “registered” professional leagues and one-quarter of one percent fee that would be paid to the NCAA for wagers placed on games including at least one FBS football team or one Division I men’s basketball team. Smith’s bill states that “royalties received by public universities under this section shall be used solely for athletics compliance.”
This is the first time a bill has been filed anywhere in the U.S. that specifically earmarks a so-called royalty payment to the NCAA, which was headquartered in nearby Kansas City until it moved to Indianapolis in 1999.
It’s Unclear What Missouri Would Get in Exchange for Sports Betting ‘Royalty’
What Missouri would get in exchange for the fee, which is referred to as a “royalty” in the bill, is unclear. In their lobbying efforts, representatives for the professional leagues initially called the fee an “integrity fee,” and promised that it would be used to finance efforts to preserve integrity of athletic contests. But the leagues later began calling it a royalty, while promising little or nothing in return.
The bill is at odds with SB 1013, which was filed ahead of the 2019 session by Missouri Senator Denny Hoskins (R-District 89) on Dec. 1. In his bill, Hoskins turned the so-called integrity fee on its head by suggesting that sportsbooks pay 0.5 percent of handle into what he’s calling the “Entertainment Facilities Infrastructure Fund,” and the money would be used to build, maintain and improve sports facilities or cultural facilities.
Combined the full one percent of handle, which is what the leagues were hoping for from the start, effectively works out to 20-25 percent of a typical sportsbooks’ gross revenue. None of the eight states with legal sports betting so far pay the professional leagues or the NCAA any kind of fee.
While Smith suggests a royalty in his bill, he does put sportsbooks on reasonable ground when it comes to taxes – the bill calls for a tax of 6.25 percent of adjusted gross revenue, which is lower even than Nevada’s 6.75 percent. Tax revenue would be put into the “Gaming Proceeds for Education Fund,” and directed toward education. The bill also calls for a $5,000-a-year-administrative fee and a $10,000-a-year “reinvestigation” fee. This second fee would be placed in a fund and used every five years to complete a “full reinvestigation of the certificate holder.”
New MO Sports Betting Bill Mandates Use of Pro-League Data
Smith’s bill does not directly mandate that sportsbooks buy data from the professional leagues, but does include a section stating that sports governing bodies can notify the state that they want sportsbooks to do so. If a sports governing body does so, then the sportsbooks will be mandated to buy from the leagues or their third parties. It’s a safe bet that every governing body will require that Missouri sportsbooks buy data from them.
Other items of note in the bill:
- Limited interactive gaming would be allowed under this bill. Similar to Mississippi, the bill allows for interactive gaming when the bettor is on site — but not remotely throughout the state;
- Prop bets on “collegiate athletic or sporting event or on the individual performance statistics or an athlete in a collegiate athletic or sports event” would be prohibited;
- Interactive gaming licensees would pay a $10,000 application fee and a $5,000 annual renewal;
- Brick-and-mortar sportsbooks would be charged a $10,000 application fee;
- Athletes, coaches, officials, team owners and their families, and others connected to professional or collegiate teams would be prohibited from placing sports bets on the team with which they are connected; and
It appears that under the terms of this bill, it would be legal to bet on Missouri teams.