Missouri House plans to bring sports betting to the state

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When the Kansas City Chiefs open their 2022 season in early September, it may be possible for fans in the stands to bet on who will win, how many touchdown passes Patrick Mahomes will throw and even if the toss will be heads or tails. face.

But before that, supporters of sports betting will have to overcome opposition from proponents of video lottery terminals, who promise much higher state revenueand the demands of lawmakers who predict big profits for casinos but nothing for their communities.

A bill to legalize sports betting is heading to the House floor for debate after a committee vote on Tuesday. Three other bills legalizing sports betting will go through public hearings on Wednesday before the Senate Appropriations Committee.

Tax notes estimate that Missourians will bet about $150 million annually on sporting events, resulting in tax revenue of $13 million to $15 million annually. About $1.3 million will go to cities that have one of the 13 licensed casinos, with the rest going to state education programs.

But the bills bring no revenue to cities and counties when bettors place bets in non-casino communities.

“There are a lot of people who are going to make a lot of money from this and none of that money, in the form of this current bill, is going back to where people live,” said Rep. Scott Cupps, R -Shell Knob. Cupps is the chairman of the House Select Committee on Public Policy, which approved the bill by a 4-2 vote last week, with Cupps abstaining.

Ideas being considered, Cupps said, include a cent per bet, or $1 per day, that would be distributed depending on where the bet is made.

The issue is best summed up, he said, by a statement from an official in his southwestern Missouri district.

“We’re not saying we want a slice of the pie, we’re just saying we want crumbs,” Cupps said.

How it would work

The House bill that goes to the floor and two of the Senate bills scheduled for a hearing on Wednesday are nearly identical. The third Senate bill, sponsored by Sen. Denny Hoskins, R-Warrensburg, has many of the same elements, but with a higher tax rate and a role for the Missouri Lottery.

Similar games, supported by most casino operators and major sports teams, would allow fans wishing to bet on a game to do so in casinos or using a licensed online platform such as FanDuel Where DraftKings. The Missouri Gaming Commission would regulate and license the platforms.

Each of Missouri six licensed casino operators would be able to offer three platforms, or “skins”, per casino, with each casino company capped at six in total. Two casino companies, Penn National and Caesar’s Entertainment, each operate three casinos in the state.

This will award one for each of the six major sports teams that play their games in the state – the Chiefs, St. Louis Cardinals, Kansas City Royals, St. Louis Blues, Saint Louis City Football Club and the Kansas City Current Women’s professional soccer team.

“All of Missouri’s professional sports teams support sports betting as a way to increase engagement with our fans and provide a fun and exciting new way to enjoy the sport and our teams, who are such ingrained members of our communities,” Cardinals president Bill DeWitt III said. said in a House hearing. “We also know that sports betting will generate a significant source of tax revenue for Missouri.”

Only bets placed in person at a casino or through one of the approved websites would be legal in Missouri. The sports teams would each have a “designated sports quarter” for 400 meters around its stadium where only the platforms chosen by the team could advertise.

“The goal is to allow teams to ban the kind of heinous, ambush marketing that might otherwise occur when our fans walk into stadiums and arenas with their families,” DeWitt said.

The bills identify two types of bets – a level one bet would be a bet on the score or final result and a level two bet would be any other type of bet, such as total points, statistics of a particular player or some potential event such as a home run or an interception.

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The bills require gaming platforms to use official league data to settle tier two bets.

“This is a very important issue for teams because we want to make sure that if fans bet on our games, we can control the accuracy and synchronization of the data so that certain unauthorized data sources cannot thwart the system. “, said DeWitt. .

Platform operators would be required to publish point spreads, lines and odds for the various bets offered. The platforms would also set the minimum and maximum bets allowed to punters.

Using only league data to determine the outcome of tier two bets is too limiting and has only one purpose, and that is money, said Ryan Soultz, vice president of government affairs at Boyd Gaming. Boyd Gaming, which operates as Ameristar Casino in Kansas City and St. Charles, is the only casino operator opposed to the industry-backed bills.

“I can tell you that I understand why leagues want to require official data,” Soultz said, “it’s a source of revenue.”

Strict regulation can provide protections against untrusted data, Boyd said.

“You want to have a robust set of data streams coming in so you can see the discrepancies when you set those lines,” he said.

Chances of passing

The bills directed at the House floor are facing headwinds from opponents who want to raise the proposed tax rate, give the Missouri Lottery a piece of the action and get more money from the casinos for in-person player visits.

Under the bill in the House, sports betting operators would pay the state 10% of their profits. Of that money, 90% would go to state education programs and 10% to casino host cities.

The casino tax rate is 21%, which generated $326 million in revenue in fiscal 2021.

The 10% sports betting tax is intended to put Missouri in the middle range of tax rates for States that allow sports bettingsaid Missouri Gaming Association lobbyist Mike Winter. Tax rates for legal sports betting are as low as 6.75% and as high as 51%.

“I’ll tell you that a 51% tax rate is probably not realistic if your goal is to see substantial operator build and push and try to attract that business, so we’re trying to get to a place where there’s a reasonable tax rate,” Winter said during the committee hearing.

Bob Priddy, retired Missourinet editor, told the committee that taxing sports betting separately from other casino revenue gives money that should go to schools.

Sports betting per capita is as high or higher in high-tax states than in low-tax states, he said.

“Clearly enough, casinos can and do run over 10%, over 21%,” Priddy said.

Two of the Senate bills incorporate the 10% tax, while Hoskins’ bill sets it at 21%. Hoskins’ bill also allows the Missouri Lottery to set up terminals for “parlay” betting, which is a bet that selects winners in two or more sporting events.

The casinos oppose the higher tax and the role of the lottery, but Hoskins is adamant he needs to be happy with the bill or it won’t pass.

“I’m concerned about making sure the bill that comes out is the best for Missouri taxpayers,” Hoskins said.

Another issue is how profits are calculated before they are taxed. The bills, as introduced, would allow any promotional efforts, such as free credits to bet or prizes for creating accounts, to be deducted. Under the changes made by Cupps, sports betting operators would benefit from 100% deductibility in the first year and a phase-out at the rate of 25% per year over four years.

Senate bills do not phase out deductibility.

“The promotional gambling deduction is something for the industry to entice players from the illegal market into the legal sports betting market,” Winter said in an interview.

It makes sense to allow promotional costs to be deducted when introducing legal sports betting to attract players who may be using illegal platforms, Cupps said. Once established, the deduction should not be so generous.

“We really want to see something that fits Missouri,” he said. “We don’t care how it’s done, we just want some fairness there and making sure the value to the state is fair.”

In addition to a tax rate equal to the current tax, Priddy wants an increase in the fees paid for each person who visits one of the 13 casinos. The fee, at $2, has been in place since 1992 and, if adjusted for inflation, would be nearly $4 today.

Fees are charged for every two hours a person stays in the casino and are split between the Missouri Gaming Commission and host cities. A raise would generate more money for host cities, more money for state programs such as veterans homes and scholarships, and possibly money for a history museum. steamboats in Jefferson City.

“I don’t know of a single bill without appropriations that has the chance to do more good for more people than any other bill without a general tax increase,” Priddy said.

The casinos supporting the bill that oppose a price increase did not decide to support Cupps’ appeal for a fee that would go to communities where people gamble online, Winter said in an interview.

“We are looking at some of these ideas,” he said.

There is a problem on the horizon if lawmakers pass the sports betting bill that could prevent their online offering. The Missouri Constitution only allows casino gambling within 1,000 feet of the main canals of the Missouri and Mississippi rivers.

Sports betting bills would require bets to be processed by a computer at a licensed casino instead of requiring bettors to visit a casino.

When Florida tried to do something similar, allowing the Seminole Nation to operate statewide sports betting with computers in their casino, a federal judge called it “fiction” bets were made at the casino.

The move raises some interesting questions, Cupps said, but he thinks the Missouri courts will allow it.

“I’m afraid we’re legalizing something that’s going to be challenged in court,” he said. “I think they crossed their t’s and dotted their i’s.”

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