Missouri Considering Online Casino, Online Poker, And Some Seriously Low Tax Rates

Posted By Derek Helling on March 4, 2021

The expedient, prudent thing to do when expanding gambling in a state is to legalize sports betting, online casinos, and online poker in one shot instead of parceling those three verticals out over the course of years. That’s what the latest Missouri online gambling bill aims to do.

However, it’s no foregone conclusion that sports betting alone will become legal in the Show-Me State this year. With that in mind, the tenets of HB 1364 might be asking too much of a legislative body that has struggled to form a consensus on smaller matters.

Yet another Missouri online gambling bill surfaces

Don’t stop us if you’ve seen this before, because you likely have. For the past half-decade, lawmakers in Missouri have made attempts to expand gambling. Since the fall of the Professional and Amateur Sports Protection Act (PASPA) late in 2018, that’s involved sports betting and online casino gambling.

MO Rep. Dan Houx also included online poker in his bill. As far as sports betting goes, it’s pretty similar to a bill currently in the upper chamber of the MO legislature, SB 256. For example, it would allow both online and retail wagering, with online sportsbooks tethered to the state’s 13 casinos. Each licensee would get three skins.

Online casino component would have lowest tax rate in the nation

The bill also matches the national low tax rate for sports betting revenue of 6.75% that operators currently pay in neighboring Iowa and Nevada. Casinos would pay $50,000 to initially acquire a license but only $20,000 to renew it each year.

As far as the online casino components go, the bill has all the trappings that gaming companies could want. Again, online casinos and poker would be tethered to the state’s brick-and-mortar casinos. In the same vein, they would get three skins for both verticals.

The tax rate for online poker, slots, and table games revenue would be 12%. That would be a new national low in that category. Licenses of this type would cost another $50,000. There is also a $25,000 suppliers license fee, which companies like BetRivers would have to pay to activate their existing deals to offer those types of games in the state.

Of greatest interest to online poker fans is that the bill also makes provisions for interstate compacting, as other jurisdictions allow. So while this bill is about as comprehensive as it gets, the only thing that matters is whether it stands a chance to become law. That’s precarious.

Casino-friendly bill faces uphill battle

Should this bill proceed out of the MO House, it may face strong resistance or see a dramatic overhaul in the MO Senate. There, members are struggling to form a cohesive framework for sports betting alone. The variances between the several bills include:

  • What the tax rate should be
  • How many online skins to allow each licensee
  • Official data requirements
  • Whether to mandate in-person registration for online wagering

Then there’s the issue of video lottery terminal (VLT) codification, which held up sports betting legalization in the MO Senate last year. Then, a significant number of Senators wanted to include making the “grey” machines explicitly legal in the sports betting package. That became a death knell for the entire issue, as other members of the body weren’t willing to make that concession.

While there is a bill that explicitly addresses the VLT issue in the MO Senate right now, it’s not favorable to the VLT lobby. That may be a strike against HB 1364 as well, as that bill makes no mention of those machines.

The potential path forward for HB 1364

As of March 4, the bill has yet to be assigned to a committee in the House. When that happens and a hearing is on the docket, Missourians will get a better idea of the sentiments of their elected officials on the proposal.

It’s possible that the Senate could amend Houx’s bill significantly to appease all of its parties, but that might make reconciliation with the House-approved bill difficult. In the event that the two chambers are able to hammer out an overarching compromise, there’s also no guarantee that MO Gov. Mike Parson will give his approval.

Thus far, Parson has been silent on the issue of gambling expansion this year. However, he has a consistent record of adhering to the wishes of the conservative interests that funded his reelection campaign. Therefore, a veto is possible.

It looks like HB 1364 might be the best bill to come out of the MO legislature yet this year as far as efficient gambling expansion goes. However, efficiency and practicality for actual enactment aren’t always bedfellows.

Photo by Zhi Qi | Dreamstime.com
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