Missouri Sports-Betting Ballot Becomes $50m Battle Between Industry Powers

October 23, 2024
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Efforts in Missouri to legalize sports wagering have become an expensive battle between U.S. sports-betting heavyweights and a casino powerhouse over the terms under which betting would be legalized.
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Efforts in Missouri to legalize sports wagering have become an expensive battle between U.S. sports-betting heavyweights and a casino powerhouse over the terms under which betting would be legalized.

Amendment 2 will be on the ballot for the November 5 general election and if approved by a majority of Missouri voters, would permit state-wide mobile sports betting, as well as land-based wagering at riverboat casinos and professional sports facilities.

The amendment is being championed by a coalition of leading online sportsbook operators and Missouri professional sports teams who have lobbied for sports-betting legislation in the Show Me State for several years.

However, those efforts to legalize betting through legislative action have failed on multiple occasions, typically being held up over an overlapping lobbying campaign to also regulate video gambling machines as part of any sports-betting bill.

This year, the group instead pursued a ballot measure backed by the political action committee Winning for Missouri Education, collecting more than 183,000 valid signatures to place a proposed state constitutional amendment on the ballot.

The campaign has been funded almost entirely by DraftKings and FanDuel, to the tune of a combined $36m, with the latest contribution being an additional $4.6m from FanDuel last week.

Last month, however, an opposition group was also formed under the name of Missourians Against the Deceptive Online Gambling Amendment.

The group was established following a favorable ruling by a Cole County circuit judge on a challenge to the validity of the signatures collected by sports-betting supporters.

To date, the group has raised more than $14m to support its campaign to defeat the referendum, but all from casinos or subsidiaries owned by the same entity, Caesars Entertainment, which operates three casinos in Missouri.

“Our campaign in general is not opposed to the expansion of sports betting,” Brooke Foster, a spokesperson for the Missourians Against the Deceptive Online Gambling Amendment campaign, told Vixio GamblingCompliance. “We have it in Kansas, we have it in Illinois. It's something that's very real; 38 states have it. What we're opposed to is the way the measure was written.”

Foster said that in addition to taking issue with how the revenues from sports betting would be allocated, the group is opposed to provisions that allow for promotional play deductions on taxable of up to 25 percent of that month’s betting handle, as well as federal excise tax deductions.

“It's being sold to voters as an education funding measure, but because of all the deductions that DraftKings and FanDuel can take, perfectly legally … as well as they can write off their federal taxes, and then they need to pay the problem gambling fund in Missouri, it's our concern, and that of the state auditor, that there could be zero dollars for education,” Foster said.

There are other specific provisions of the initiative that the two sports-betting giants had a heavy hand in drafting that have reportedly frustrated some land-based casino operators in the state, including Caesars.

Those include provisions that allow the Missouri Gaming Commission to issue two untethered mobile sports-betting licenses, as well as limiting the amount of mobile betting skins to one per casino-owner rather than one per Missouri casino, limiting the number of market-access options available to Caesars, which owns multiple properties.

Each of the state’s professional sports teams are also entitled to receive one mobile sportsbook skin as part of the proposal, creating 14 market-access opportunities in total.

In recent days, however, the opposition group may have adapted its approach, cancelling more than $1.2m in television advertising, according to the Missouri Independent, with Foster telling the local media outlet that the group had chosen to “focus our efforts on grassroots outreach and community conversations”.

Polling has typically shown support among Missourians for the sports-betting measure.

An August YouGov poll showed that 50 percent of voters supported the measure, although that poll was taken before the opposition group was formed and began its own advertising campaign. 

“With two weeks to go before the election, this turns into a a turnout model for proponents and opponents of the measure,” said Brendan Bussmann, founder of gaming-industry government affairs consultancy B Global Advisors.

“Recent polling has had the positives around 50 percent of the electorate but that needs to hold solid to get across the finish line in November.

“Right now, it appears as though there are razor thin margins to get a plurality based on current data,” Bussman said.

“This becomes challenging because at this point you want a nice cushion.  This may come down to Election Day and who shows up at the polls and makes it all the way down to the bottom of the ballot.”

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