Missouri House Moves Forward On Sports Betting

March 24, 2022
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Missouri’s House of Representatives advanced a modified sports-betting bill for passage on Wednesday, the most significant step taken to towards enacting legislation in the state after years of misfires.

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Missouri’s House of Representatives advanced a modified sports-betting bill for passage on Wednesday (March 23), the most significant step taken to towards enacting legislation in the state after years of misfires.

The House voted verbally to preliminarily approve House Bill 2502 on second reading, setting up a final approval vote that could come as early as Thursday.

The plan is backed by a coalition that includes all of Missouri’s major professional sports teams, several major national sports-betting operators and five of the state’s six casino operators.

The bill would allow three online skins for each of the state’s 13 casinos, although operators who own multiple properties in Missouri would be capped at six total skins.

Each of the six professional sports teams would also receive a single online wagering skin. The teams would not be able to operate a land-based sportsbook at their respective stadiums and arenas as part of the legislation, but they would receive a 400-yard area around the stadiums in which they could prohibit sports betting-related advertising except by team-selected partners.

The lone holdout to the plan, Boyd Gaming, has argued against the inclusion of a requirement for operators to use official league data to settle in-play wagers.

“I believe with this coalition that’s been put together, and just because we’ve had one holdout, I would assume it’s a deal-breaker [for the coalition],” said Representative Dan Houx, the bill’s sponsor, when asked on the floor about the potential of removing the data requirement.

The House approved two amendments to the version of the bill that came out of committee earlier this month, the first of which lowered the planned tax rate from 10 percent of adjusted revenues to 8 percent.

The adjusted revenues also include promotional play deductions that phase out over four years, starting at 100 percent deductibility in the first year and declining by 25 percent each year.

The adjustment in the Missouri tax rate came as neighboring Kansas progresses on its own bill, which could be acted on next week.

“I talked to a Kansas rep today this morning, who told me he believes Kansas is going to legalize sports gambling this year, which means our two largest population centers in Kansas City and St. Louis will be surrounded by states that accept sports wagers, and 12 of our 13 casinos are directly next to a state who either now allows sports gambling or will allow sports gambling,” said Representative Wes Rogers, who proposed the lower rate.

“Missouri is a better state than Kansas in every possible way. Our tax rate should be lower,” he added.

“Let's get ahead of this, and the thing I would add to the people that are skeptical is right now the tax rate on sports gambling that's already happening is 0 percent and 8 percent is lot better than that and it's also better than the Kansas rate.”

The second amendment added several new provisions to address problem gambling, including a requirement for the Missouri Gaming Commission and the Department of Mental Health to conduct an annual research report that includes a study of existing compulsive gambling and the social and economic impacts of gambling in the state, as well as recommendations on compulsive gambling programming and financial appropriations.

“There will be an increase in problem gambling, both for new individuals coming into this utilizing the platforms with sports wagering, and those that are currently struggling,” said Representative Ben Baker, who proposed the problem gambling amendment.

“And, you know, with an industry that brings in hundreds of millions of dollars, this is something that we have to look at,” Baker said.

The biggest difference in Missouri this year, beyond the coalition agreement, is the separation of sports betting from the proposed regulation of video lottery terminals (VLTs) in the state.

“I think we've learned over the years … if history's taught us anything, don't keep beating our head against the same wall the same way,” said Representative Dan Shaul, who sponsored legislation in past years that combined the two issues of sports betting and VLTs. “Let's at least take a different approach.”

Senate legislative sponsors have also agreed to separate the two issues this year but have also pushed for a higher tax rate than the 8 percent figure that now exists in the House bill, setting up what could be a contentious negotiation if both chambers ultimately bring legislation over the finish line.

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