Missouri's path to pass legislation that would legalize sports betting cleared one major hurdle as state lawmakers in the House advanced a bill out of committee. The bill now awaits debate in front of the entire House.
In its current form, HB 119 would make Missouri the latest state to legalize wagering on sports since a landmark ruling by the U.S Supreme Court last May. That decision struck down a federal ban on legalized sports betting outside of Nevada, instead allowing each to decide whether to permit the practice.
Eight states have since opened operational sportsbooks in the past 11 months, with several expected to do so by the end of the year.
However, there are several components of HB 119 that call into question about the viability of sports betting within Missouri and whether it would be profitable for casinos to open sportsbooks. There is no mention in the bill of online sports betting, an aspect that has proven to be a considerable revenue generator.
The leading states in revenue generated from legalized sports betting, Nevada and New Jersey, both have made online wagering readily accessible. In New Jersey, more than 80 percent of the betting on sports during each month of the first quarter in 2019 was done online.
HB 119 also contains what is commonly referred to as an “integrity fee.” This tax, which would be set at 0.75 percent on amounts wagered, would make Missouri the first state to institute a law that mandates its licensed sportsbooks to pay a fee to professional and collegiate sports organizations whose games the public wagered on.
The NFL, NHL and Major League Baseball -- all of which have professional teams in Missouri -- have lobbied for integrity fees in states where legalized sports betting is offered, though its collective efforts have been unsuccessful.
Missouri sportsbooks would have an additional tax levied against them at a 0.60 percent rate of its handle. This tax would be earmarked for construction projects and any infrastructure improvements on various facilities used for public events, including stadiums that host professional sports teams.
These stadiums include Busch Stadium (MLB’s St. Louis Cardinals), Arrowhead Stadium (NFL’s Kansas City Chiefs), Kauffman Stadium (MLB’s Kansas City Royals), and Enterprise Center (NHL’s St. Louis Blues).
None of the eight states with operational sportsbooks -- Nevada, Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia -- have imposed such regulations on its sports betting industry to the same degree as Missouri would.
State Sen. Tony Luetkemeyer said, via The Missouri Times:
“We’re in the Show-Me State. We do things our own way. I think it’s really an easy decision to make sure we’re standing with our sports organizations to make sure we’re protecting the integrity of the game.
“It’s not fair for teams to have increased compliance costs associated with sports betting and for the casinos not to expect that a small percentage of that money they’re going to be generating is going to go to sports teams.”
As noted in HB 119, proponents of legalized sports betting in Missouri say the state could generate up to $38 million in new revenue. Conversely, critics believe HB 119 as it is written would not generate anywhere close to that dollar amount due to the various restrictions and taxes that the bill contains.
Missouri’s 2019 legislative session is set to conclude May 17. Republican Gov. Mike Parsons, though not an advocate of sports wagering, has said he would not obstruct any efforts to legalize it within the state.