Missouri legislators are considering bills to legalize sports betting statewide after the U.S. Supreme Court last year repealed a federal regulation.
Missouri Senate Bill 222, filed Jan. 7, would modify the definition of “gambling game” to include sports wagering in Missouri and allow bets on professional and college games on an excursion gambling boat or over the internet to persons located in the state.
The bill, sponsored by Lincoln Hough, R-Springfield, had its first reading in the Senate on Jan. 9, followed by a second reading on Feb. 7, according to the Missouri Senate’s website.
The Missouri Economic Development Committee voted to pass the bill on Feb. 26. It was scheduled to be debated on the House of Representatives floor for perfection on March 14, at which point it would get scheduled for a third reading. The bill will need a majority of at least 82 votes in the House before being sent back to the Senate.
There are four other similar bills – SB 44, SB 195, HB 119 and HB 859 – in front of Missouri legislators. SBs 222 and 44 are the only two on the calendar for perfection, where amendments can be added by House members, according to the Missouri Senate’s website.
“I see some version of this gaming space moving forward this session,” Hough said.
The recent Supreme Court verdict allows states to decide how to handle sports gambling on their own. Currently in Missouri, bingo, lottery, horse racing, fantasy sports and casinos are legal under Chapter 313 of the state statutes.
“This is an industry that is operating in the dark right now,” Hough said of sports betting. “This is a way to bring it into the light and capture tax revenue.”
Hough said revenue from a sports betting bill would benefit Springfield via funding for Missouri State University’s equity funding model through the Council on Public Higher Education and Ozarks Technical Community College’s planned Center for Advanced Manufacturing and Technology.
“It allows us to grow the overall revenue pie of the state so we can focus on other priorities, like education,” Hough said of legalized sports betting.
At OTC, Chancellor Hal Higdon has said the state set aside $5 million in its fiscal 2020 budget for the center, and the college will seeking another $5 million during the next year’s legislative session.
Hough said through his role as vice-chairman of the Appropriations Committee, he can provide a voice to lobby for public money to be disbursed to the Queen City for projects like the OTC center.
According to the language in Hough’s bill, sports betting could be conducted with chips, tokens, electronic cards, money or “other negotiable currency.” An area in approved licensed casinos would be designated for sports betting.
If passed, approved licensed facilities would be able to apply to the Missouri Gaming Commission and pay an application fee of $10,000 with a renewal fee set at $5,000 every five years.
If it’s an interactive sports wagering platform, such as International Game Technology PLC (NYSE: IGT), there is an annual renewal fee of $5,000.
The license fees would go into a fund established for operation and investigation of companies partnered with casinos with tax revenue going into the Gaming Proceeds for Education Fund, said Ed Grewach, general counsel for the MGC.
There would be two types of applications, one for casinos and another for sports wagering operators.
“That would be a company that operates the sportsbook and provides hardware and software,” Grewach said. “We would need to investigate the sports wagering operators who would contract with casinos.”
Revenues received from the 6.75 percent tax on gross adjusted receipts would be deposited into the education fund, which is overseen by the state treasurer. The fund had a balance of $12.1 million in February 2019, according to a fund activity report from Missouri Treasurer Scott Fitzpatrick.
Hough said other states were considered when crafting SB 222 and the Las Vegas tax rate of 6.75 percent was adopted for the bill.
For the internet component of SB 222, the MGC would test and monitor the software used by the casinos.
Bets would be placed at any of the 13 riverboat casinos in Missouri or from an online account through one of the casinos.
“The persons who want to open a wagering account would go to the casino and open an account, and could wager anywhere in the state of Missouri,” Grewach said.
Another Senate bill
SB 44 is similar to SB 222 in how and where sports gambling would be conducted and with license fee costs, but it differs in tax rate. SB 44 would impose a 12 percent tax on adjusted gross receipts with a 2.5 percent administrative fee, according to the bill’s language.
Through both bills, a Springfield resident could set up an account at any Missouri casino in person, then place bets back home in Greene County.
The biggest difference is SB 44’s Missouri Video Lottery Control Act section, which would allow video lottery game terminals in bars, taverns, restaurants, fraternal organizations or veterans’ organizations that have a liquor license, truck stops, convenience stores, liquor stores or grocery stores.
College fraternities and sororities would be excluded from having terminals.
The proposed lottery act would be similar to the current law in Illinois, where the Video Gaming Act was passed in 2009 and went into effect in 2012.
The Illinois law allows a maximum of five terminals at an establishment with a maximum wager of $2, according to its language.
SB 44 would allow five terminals per establishment with a maximum wager of $5.
Illinois receives 30 percent of the net terminal income from each of the 30,964 video game terminals at 6,773 locations, according to the Illinois Gaming Board, the entity which oversees gambling in the state.
The U.S. Supreme Court paved the way for states to decide how to handle sports betting in May 2018, when it struck down the 1992 federal law banning the practice after hearing the court case Murphy v. National Collegiate Athletic Association in December 2017.
The case was in the legal system for nearly five years before being heard by the Supreme Court.
The state pioneer of sports betting is Nevada, which was exempt from the federal Professional and Amateur Sports Protection Act of 1992 that prohibited sports betting. Nevada legalized all forms of sports betting in 1949.
According to the American Gaming Association, January 2019 was the first time wagers from the national sports betting market eclipsed Nevada with $503.1 million of all bets placed. Nevada reported $497.5 million in January, according to the gaming association.
“The demand for legal sports betting is abundantly clear, with the majority of legal wagers now being placed in markets that didn’t even exist a year ago,” said Sara Slane, senior vice president of public affairs for AGA, in a March 1 news release.
The AGA release states $998.8 million was legally wagered in January in seven states.
Nevada posted record results from sports betting in 2017 with $248.8 million in state revenue on wagers of $4.87 billion, according to the AGA’s 2018 State of the States report.
According to ESPN reports, eight states have full-scale legalized sports betting: Nevada, New Mexico, Mississippi, West Virginia, New Jersey, Rhode Island, Delaware and Pennsylvania. Two states, New York and Arizona, recently passed a bill regarding sports betting while 29 states, including Missouri, have introduced bills that have not yet held a vote.
Missouri first attempted sports betting legislature in January 2018, with former Rep. Bart Korman, R-Warrenton, introducing House Bill 2320. Its last action was in April 2018 for a public hearing, according to the Missouri House of Representatives website. The bill was never scheduled for a vote.