JEFFERSON CITY—A state Senate bill to legalize sports betting in the state drew a sharp rebuke Thursday from the Missouri Gaming Association.
Senate Small Business and Industry Committee chairman Denny Hoskins, R-Warrensburg, said his bill is designed to curb sports betting through online platforms based outside the U.S. and give sports bettors a way to place bets in a regulated market.
“There is a lot of illegal sports betting going on,” Hoskins told the Tribune after a hearing on the bill in his committee
The 13 casinos in Missouri want sports betting but the taxes and fees imposed by Hoskins’ proposal are excessive, said Mike Winter, executive director of the association.
It would put an effective tax rate of about 30 percent on sports wagering he said. Currently gross casino revenue is taxed at a rate of 21 percent and regular casino games have much higher profit margins than sports betting, Winter said.
“The products are completely different,” Winter said. “Slot machines, electronic gaming devices, table games have different odds and historically payouts may be different.”
Hoskins’ bill is one of two he authored and four total bills being considered by lawmakers to legalize sports wagering statewide.
In May 2018 the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992, which effectively banned sports wagering in all states except for Nevada. Since then, seven additional states including Delaware, Pennsylvania and New Jersey legalized sports wagering, according to the American Gaming Association.
Sara Slane, American Gaming Association vice president of public affairs, said on a call with reporters Wednesday that 15 states including Arizona, Connecticut and Indiana are considering legalizing sports wagering.
Seven states considering whether to legalize mobile gambling. Three of the four bills being considered by the General Assembly would allow Missouri residents to place bets remotely.
“In order to bring consumers into the legal regulated market they need to offer convenient access,” Slane said.
A “geo-fence,” a digital boundary based on a device’s location, would prevent out-of-state bettors from wagering in Missouri, Hoskins said.
It is Hoskins’ second attempt to to legalize sports wagering in the state.
At the hearing, Hoskins made it clear that even if legalized, sports wagering will not be a golden goose some lawmakers dream of.
If passed, his proposal would tax revenue from sports wagering at 12 percent. The revenue would be used to fund education, as mandated by the state constitution, Hoskins said.
A 2 percent fee on all sports bets would also be collected to fund the Missouri State Veterans’ Commission Capital Improvement Trust Fund.
A fiscal note estimated the bill would raise between $6.3 million and $21.8 million for education and $1.6 million to $4 million for the veterans fund.
“This is not the pot of gold at the end of the rainbow,” Hoskins said. “It will not solve all the needs we have, but it is a start.”
Last year the Kansas City Royals and St. Louis Cardinals testified in support for a provision to give both teams 1 percent of all bets. This fee, known as an integrity fee, is designed to be an agreement between bettors, leagues and players and ensure the integrity of the games being bet on.
Hoskins’ bill takes 0.5 percent of all bets as an integrity fee, about $5.3 million annually, and places that money into a fund which could used to pay for taxpayer funded improvements to sporting venues.
Missouri still owes $60 million on bonds issued to build the 23-year-old Edward Jones Dome, the former home of the St. Louis Rams, Hoskins noted.
The integrity fee will not raise enough to finance most projects, but will offset taxpayers’ burden for small renovations, Hoskins told the committee.
“Professional as well as amateur teams wanted that royalty,” Hoskins said. “We have all these needs every year where people come to us looking for money for their infrastructure projects.”
Since the Supreme Court decision, pro leagues have moved closer to stances favoring sports betting.
In October the NHL and MGM Resorts announced a partnership making MGM the official betting partner of the NHL and allowing MGM to use new player tracking technology for betting purposes. Early last month the NFL and Caeser’s Entertainment also agreed to a sponsorship worth $30 million, which will make the company the first casino sponsor of the NFL, according to espn.com.
In October, the NCAA formed a committee to examine the impact of wagering on Division I sports. Earlier this week NCAAA President Mark Emmert doubled down on his opposition to sports gambling.
The bill heard Thursday is one of two sponsored by Hoskins’ to legalize sports wagering. State Sen. Lincoln Hough, R-Springfield, and State Rep. Cody Smith, R-Carthage, also have similar bills that will legalize sports wagering.
Hoskins’ other bill would run sports wagering through the Missouri State Lottery.
Hough’s bill would place a 6.75 percent tax on all sports wagering revenues. Winter, from the Gaming Association, said the group intends to support that bill. A fiscal note for Hough’s bill was not yet available.
At a news conference with Thursday, Gov. Mike Parson declined to state what tax rate he thinks is appropriate for sports wagering legislation.
“I’m going to see what that package is before I make a decision whether that’s good or not,” Parson said. “But I think it’s coming.”