A Missouri Senate committee advanced sports betting legislation Tuesday but saved any drama for the Senate floor.
The Senate Appropriations Committee voted 8-1 to advance two sports betting bills passed by the House in March. The main bill is HB 2502 from Rep. Dan Houx, with a backup of the same language in HB 2556.
Each represents a compromise pitched by sports teams and casinos earlier this year.
A hearing two weeks ago identified a number of issues members of the committee had with the House bills. Rather than offer an amendment, the committee chose to advance the bills as they came over from the House.
But that doesn’t mean the Senate won’t be making changes to the Missouri sports betting bill. Committee Chair Dan Hegeman described the bills as a “work in progress.” He said to expect a higher tax rate and more money earmarked for problem gambling in the final Senate bill.
Missouri sports betting tax rate
The casinos and teams proposed a 10% tax rate on adjusted sports gaming revenue.
After talk in the House committee that the number was too low, a surprising amendment came on the House floor. Before the bill passed, Rep. Wes Rogers asked colleagues to lower the tax rate to 8%.
His curious reasoning was that Missouri should have a lower tax rate than Kansas because “Missouri is a better state than Kansas in every possible way.” Kansas is expected to finalize a bill with a 10% tax rate when the Legislature returns for a veto session next week.
An 8% tax rate would be the third-lowest of any state with legal sports betting. Nevada has a 6.25% tax and Iowa has a 6.75% tax.
Sen. Denny Hoskins proposed a sports betting bill with a 21% tax rate. He chose that rate because it’s the same tax casinos pay on slot machines and table games.
In committee, the House added a five-year phase out for promotional deductions. In the first year of implementation, licensees can deduct 100% of the costs of free promotional play redeemed by patrons. That decreases by 25% each year until reaching zero in year five.
Missouri problem gambling funding to go up
The House set the amount of tax revenue going to problem gambling programs annually to $500,000.
Missouri senators could choose to increase that amount to $1 million, or put 1-2% of sports wagering revenues into a problem gambling fund.
In the last hearing, Hoskins said other states take a percentage off the top equal to $4 million to $5 million.
Looking ahead to the Senate floor
Judging by past years and previous discussions, Hegeman’s two changes won’t be the only ones proposed by Hoskins on the Senate floor.
The fiscal note for Hoskins’ sports betting bill projects an additional $150 million to the state on an annual basis. The biggest reason, more so than the tax rate, is that Hoskins’ bill gives limited sports betting to lottery retailers.
Hoskins also questioned the price of a skin. The House sports betting bill provides one skin to each Missouri professional sports team and three to each casino, with a maximum of six per casino company operating in the state.
An interactive sports wagering platform license costs $150,000, renewable annually for $125,000.
Other possible amendments brought up in Senate committee include prohibiting in-game wagers on Missouri college teams and counting video game publishers as sports governing bodies in the context of e-sports.
So, with legislation heading to the Senate floor, the Missouri Legislature is one step away from passing a sports betting bill. But there is still work to be done.
Once the Senate makes changes, the House can concur or ask for a conference committee to work out differences in the bills. The Missouri legislative session runs to May 13.
