State Sens. Denny Hoskins and Tony Luetkemeyer pre-filed legislation that, if passed, would legalize sports betting in Missouri. The bills are similar, but there are key differences — mainly concerning revenue to the state.
Regardless of which bill is ultimately approved, Hoskins says he’s hopeful for the legalization of Missouri sports betting in 2023.
Hoskins expresses confidence in passing sports betting legislation
Lawmakers have attempted to pass Missouri sports betting legislation for five years now. They came close last year, but time ran out before a compromise could be found. After Kansas legalized sports wagering earlier this year, there’s a renewed vigor in the Missouri Legislature to pass a measure in 2023.
In a recent interview with NPR’s St. Louis Public Radio, Hoskins acknowledged the differences in priorities among his colleagues in the General Assembly. But he believes there is a strong, bipartisan consensus that sports betting needs to pass in the upcoming session.
“I’ve went around the state, met several of my colleagues, both Republican and Democrat in the House and the Senate. There’s a lot of support in order to get something done this year, and so I’m very hopeful that we can.”
Disbandment of conservative caucus isn’t necessarily the end of infighting
Hoskins’ words of hope, however, should be taken with a grain of salt. The Missouri Legislature is coming off a year with a lot of infighting in the Republican supermajority. Last session saw the continuation of the conservative caucus that often voted against Majority Floor Leader Sen. Caleb Rowden. Rowden is set to become the president pro tem.
While the eventual disbandment of the caucus could signify potential unity, it’s important to acknowledge that conservatives made gains on moderate Republicans in some areas of the state in the November election. The evidence is in a handful of primaries, notably in the defeat of incumbent Sen. Bill White by first-time candidate Jill Carter. This gives conservatives a louder voice at the capitol and ultimately makes the caucus itself less necessary, Hoskins told NPR:
“We’re looking to bridge the gap with some of our former conservative caucus senators and some of the senators that were not a part of the conservative caucus, and then the new senators that are coming in.”
Hoskins, who was a member of the conservative caucus, is no stranger to holding up legislation, including sports betting. So, disagreements should remain plentiful, but the pressure to pass sports betting may force everyone to the table.
Hoskins’ pre-filing may be a product of that pressure due to its differences, primarily around the tax rate, to his previous bills. Ultimately, it shows that he’s willing to do what it takes to find a compromise for legal Missouri sports betting.
Hoskins seeks alternative Missouri revenue sources
Hoskins lays out a plan in his bill, SB-1, to find other revenue streams besides sports betting tax revenue.
“A lot of people think that it’s the golden goose. There’s just all this money that’s going to be coming in from sportsbooks to the state of Missouri. Well, Kansas legalized sportsbooks this past September. During the months of September and October, they brought in a total of $275,000 in taxes. That equates to about $1.6 million per year. That’s just a drop in the bucket; that’s hardly any revenue coming to the state.”
Much like the proposed bills from Hoskins and Luetkemeyer, Kansas levies a 10% tax rate on sports betting. Hoskins points to the millions of dollars both Illinois and Michigan allocate for problem gambling (his bill allots $5 million). He says $1.6 million is nowhere close to being enough to cover these and other costs.
Administration fees, VLTs could help offset state spending
That is where administrative fees and video lottery game terminals (VLTs) come into play. Revenue from taxes on all forms of gambling must go toward education, per the Missouri Constitution.
Hoskins’ bill proposes charging casinos administrative fees of up to $750,000 to host up to two sports wagering platforms. If all of Missouri’s 13 casinos enlisted their limit in platforms, that could bring in $9.75 million for the state. That would more than cover Hoskins’ suggested $5 million allocation for problem gambling. It’s also important to note that an administrative fee, as opposed to tax revenue, would allow the state to be more flexible with these funds rather than require them to be spent on education.
Additionally, Hoskins would like to see any additional revenue that isn’t being spent on education, problem gambling or the implementation of the sports betting program (which could cost the state up to $2 million) be allocated for veterans’ homes and cemeteries.
Last year, the state had to supplement those costs by pulling $50 million from the general fund. If $5 million of the $9.75 million is going toward problem gambling, and $2 million is being set aside for program implementation, that leaves roughly $3 million for veterans. That’s not nearly enough, Hoskins says.
That is why he is keen on also legalizing video lottery terminals, which could bring in over $250 million in revenue to the state. Hoskins’ VLT provision in SB-1 would allow these gambling machines, most common in casinos, to be used in fraternal organizations, truck stops and veterans’ organizations.
“In order to have a dedicated funding source for our veterans’ homes and cemeteries, sportsbooks alone won’t do it. So, that’s why, in my opinion, we need to pass video lottery terminals as well.”
Sports betting bill complicated by additional provisions
While VLTs are their own separate form of gaming, their fate, at least in Hoskins’ bill, is intertwined with sports betting. Luetkemeyer’s sports betting bill, SB-30, lacks any VLT-related proposal.
While a consensus appears on a state tax rate, there is likely to be some debate in the General Assembly’s upper chamber about how to flesh out the revenue streams — and exactly where to spend the money.