(The Center Square) – After years of building a consensus, Missouri’s six professional sports teams and five of the state’s six casino operators came to Jefferson City on Tuesday to testify in favor of a bill to legalize sports wagering.
But the coalition seemed to be the only unanimous force during the three-hour hearing before the House Special Committee on Public Policy. Witnesses said the bill’s 10% tax rate on sports wagering was a starting point for negotiations. The teams emphasized the importance of the tax rate as it will affect competitiveness in high population areas along Missouri’s borders, where gamblers could cross a bridge or state line and pay a lower tax rate.
The bill eliminates “adjusted gross receipts” for sports wagering, which at least one witness identified as problematic and was flagged in the fiscal note, “(Missouri Gaming Commission) assumes that this omission was done in error.” The fiscal note reports total state revenue will increase between $16.3 and $20.5 million, but witnesses stated those levels might take years to reach.
Two parallel bills, House Bill 2502 and 2556, would legalize sports wagering in Missouri. Rep. Dan Houx, R-Warrensburg, introduced 2502 and Rep. Phil Christofanelli, R-St. Peters, introduced 2566, and both made remarks to start the hearing.
“Missouri is only one of 18 states that currently does not have sports gambling,” Houx said. “More importantly, of the eight states surrounding Missouri, five passed legislation and two – Kansas and Oklahoma – currently have legislation working through the legislative process.”
Christofanelli said legalizing sports gambling is positively viewed throughout the state.
“I think many of you are aware that sports betting happens on unlicensed and unregulated apps,” Christofanelli said. “Legalized sports betting allows a framework for consumer protection and revenue generation for the state of Missouri to address our critical needs, like education.”
Representatives from Missouri’s six professional sports teams—Kansas City Chiefs (National Football League), Kansas City Royals (Major League Baseball), Kansas City Current (National Women’s Soccer League), St. Louis Cardinals (MLB), St. Louis City (a Major League Soccer expansion team) and St. Louis Blues (National Hockey League)—sent high-level executives to testify in support of the bill.
“We’re all on the same page with mobile operators and casinos and others who are key stakeholders here,” said Bill DeWitt III, president of the Cardinals. “I believe it’s a fair compromise for all involved. First and foremost, all the pro sports teams in Missouri support sports wagering as a way to increase engagement with our fans and provide a fun, exciting and new way to enjoy sports and root for our teams. We also know sports wagering will generate a significant source of tax revenue for Missouri.”
The bill places a wagering tax of 10% on the adjusted gross receipts received from sports wagering by a sports wagering operator. The Tax Foundation reports the tax rates of states with legalized sports wagering bordering Missouri are:
- Iowa, 6.75%
- Illinois, 15%
- Tennessee, 20%
- Arkansas, 12.72%
- Nebraska, 20%
New York has the highest state tax rate on sports wagering at 51%.
“We all agree there needs to be a fair tax rate,” DeWitt said. “We’ve suggested 10% in the bill, which is kind of in the middle of what we’re seeing out there in other states. We want to make sure there’s no temptation for fans to go to lower-tax states for better pricing or otherwise have taxes choke the economics of the operators who need to be successful to create a robust set of choices for Missouri consumers.”
Witnesses who testified against the bill said the state’s overall gambling laws are outdated. Before adding sports wagering, witnesses urged a review of the 1993 casino gambling laws to examine how inflation costs the state revenue and adding video lottery terminals.
“The tax piece is touchy,” said committee vice chairman Dottie Bailey, R-Eureka. “Obviously, as brokers of the state, coming in here in the last minute… we kind of get this pushed on us and we’re looking to make the best deal for the state as possible.”