Missouri Senator Estimates VLTs Will Generate $250m In Tax Revenue

December 19, 2022
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As Missouri gamblers continue to cross into Kansas to wager on sporting events, at least one veteran Republican state senator believes a deal can be reached on legalizing sports betting so long as video lottery terminals are part of any final bill.

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As Missouri gamblers continue to cross into Kansas to wager on sporting events, at least one veteran Republican state senator believes a deal can be reached on legalizing sports betting so long as video lottery terminals (VLTs) are part of any final bill.

Senator Denny Hoskins first introduced a bill proposing to legalize both sports betting and VLTs outside the state's casino locations shortly after the U.S. Supreme Court overturned the federal ban on sports betting in May 2018.

“I’ve introduced a bill every year since. So, this is the fifth year introducing a bill,” Hoskins said.

Already prefiled for consideration during Missouri's 2023 legislative session, Senate Bill 1 would allow the Missouri State Lottery Commission to implement a system of VLTs and to issue licenses to manufacturers, distributors, operators, handlers and retailers.

The VLTs would be taxed at 36 percent, with lottery retailers, bars and taverns limited to five machines each, while truck stops and other locations would be capped at eight machines.

Hoskins' bill also would authorize retail sportsbooks at Missouri casinos, with each location allowed to offer two mobile sportsbook platforms. Designated sports districts for professional franchises also could offer sports betting, including through a single mobile sports-betting platform.

Both retail and mobile sports wagering would be taxed at 10 percent.

As in previous years, however, disagreements over whether sports-betting legislation should include VLTs are likely to continue when lawmakers return to the state capitol in Jefferson City on January 4.

In an interview with VIXIO GamblingCompliance during the National Council of Legislators from Gaming States (NCLGS) winter meeting on December 10 in Las Vegas, Hoskins said he understood the opposition to VLTs, but stressed the potential revenue was so much greater than through sports betting alone.

“I think some of them want a clean sports-betting bill and I think some want a clean VLT bill and some want something in between,” Hoskins said of stakeholders.

“I think the next crop of [state] senators coming in have expressed a lot more support for getting something done this year.”

Hoskins said he believed that with new Republican legislative leadership in both chambers, it is more likely a sweeping gambling bill could be approved. Representative Dean Plocher has been named as House Speaker and Senator Caleb Rowden as Senate president pro tem.

Last session, there was support among the state’s professional sports teams and most casinos to pass a sports-betting bill. A bill won approval in the Missouri House but died in the Senate over demands from Hoskins and other members to add VLTs to the bill.

“I would like to get something done this year that includes sportsbooks as well as VLTs,” Hoskins said.

When asked why legalizing VLTs was such a critical issue for him, Hoskins told VIXIO that it comes down to needing revenue to fund a veterans’ home and a veterans’ cemetery in his district.

“We need to generate $50m to fully fund that,” he said. “Sportsbook alone won’t do that; it will bring in gross about $10m to the state and VLTs would bring in about $250m. So, in order to honor our commitment to our veterans … we need that additional revenue to come in.”

Hoskins dismissed the idea of a cap on the total number of machines in the state, saying his proposal would limit VLTs by location.

Early trends from legal sports betting in Kansas are another incentive to go broader in terms of gambling expansion, according to the Missouri state senator.

Kansas Governor Laura Kelly, a Democrat, signed Senate Bill 84 in May allowing casinos to offer mobile and retail wagering under control of the Kansas Lottery.

Sports betting’s full opening in Kansas happened on September 8, and despite more than $350m being wagered in the first two months, the state received just under $271,000 in tax revenue, according to a report from the Kansas Lottery.

The Kansas Lottery reported $186.4m in handle for November, with operators posting $19.1m in gross revenue. Promotional spending by the state’s six mobile sportsbooks declined last month to $6.5m, allowing operators to post $12.2m in adjusted gross revenue. The increase in adjusted revenue generated $795,784 in taxes for the month.

Hoskins said Kansas’ relative lackluster performance from a tax revenue perspective for the first two months was reason enough for Missouri to legalize VLTs together with sports betting.

“We’ve seen Kansas in September and October raise $271,000 that equates to about $1.6m annually,” he said. “So, I know some of my fellow Missourians have said we might lose professional sports teams to Kansas because they are bringing in all this revenue.

“That’s simply not happening and it’s not going to happen,” Hoskins said.

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