Missouri Committee Considers Sports Betting To Be A Chief Priority

Posted By Matthew Kredell on February 3, 2021

As the Kansas City Chiefs prepare to defend their Super Bowl title Sunday, Missourians won’t be able to place a legal bet on their hometown team without leaving the state. That’s because sports betting is not yet legal in Missouri.

The Senate Appropriations Committee held a hearing Tuesday that could change that in time for the Chiefs to go for a three-peat.

The committee looked at two proposed bills to legalize sports betting in the Show-Me State. Those were Sen. Caleb Rowden’s S 256 and Sen. Tony Luetkemeyer’s S 217.

Without legal sports betting, Missouri will miss out on its share of more than $500 million in legal wagers on Super Bowl LV placed across the 21 US jurisdictions where sports betting is legal, according to projections by PlayUSA.

Breaking down the two Missouri sports betting bills

Rowden and Luetkemeyer have similar proposals with a few key differences that make casinos favor Rowden’s bill while sports leagues favor Luetkemeyer’s.

Where they are similar:

  • Each authorizes Missouri’s 13 riverboat casinos to offer sports betting through retail and online.
  • Tax rate: Luetkemeyer’s bill sets the tax rate at 6.25%, Rowden’s at 6.75%. Both are extremely low by industry standards.
  • License fee: Each has a $50,000 initial license fee, with Luetkemeyer’s bill having the same rate for annual renewal. Rowden’s bill lowers renewal to $20,000. Sports betting operators pay only $10,000 for an initial license.

Whey they differ:

  • Skins: Rowden’s bill allows each casino to partner with up to three individually branded interactive sports wagering partners. Luetkemeyer limits each casino to one online sports betting platform.
  • Official league data: Luetkemeyer’s bill requires use of official league data for in-play wagers. Rowden does not.
  • Team participation: Luetkemeyer said he has a substitute for his bill that would permit entertainment districts where retail sports betting is allowed around six Missouri stadiums and arenas.

Interestingly, representatives of the St. Louis Cardinals and St. Louis Blues spoke in support of both bills. The Kansas City Chiefs only favored Luetkemeyer’s legislation.

Missouri casinos offered their support only for Rowden’s bill. However, online operators BetMGM, DraftKings, and FanDuel spoke as proponents of both.

Key issues that need to be worked out in Missouri

The bills addressed in the committee were two among six that have been introduced in Missouri this year.

Last week, the same committee held a hearing on Sen. Denny Hoskins’ legislation S 98. Hoskins made this hearing about his bill as well, spending more than half an hour questioning Rowden and Missouri Gaming Association executive director Mike Winter.

Hoskins’ questions revealed many of the sports betting details that remain unsettled in Missouri. He had other issues that included prop bets and in-play wagering, and allowing credit cards to be used to place sports bets.

Rowden asserted that he was willing to negotiate on the details of his bill. His priority is getting sports betting legalization done.

To VLT or not to VLT

Hoskins’ bill combines legalizing sports betting with another gambling expansion. He wants to authorize video lottery terminals at Missouri bars, truck stops, and fraternal organizations.

He’s pushed for the legislation for years. So when Winter, who spoke against his bill last week, offered that Missouri should regulate sports betting to bring the illegal market into the light, he pounced.

Hoskins asserted that he could use that same argument for legalizing VLTs. There are more than 10,000 illegal gambling machines believed to be operating in the state.

This was an issue in the Missouri legislature last year. However, after the effects from COVID, bars could use the boost even more. Meanwhile, casinos also faced losses and don’t want to see slot-like machines legal around the state.

That divide between casinos and those who want to offer VLTs likely needs to be overcome for Missouri to legalize sports betting this year.

Tax rate

Hoskins pointed out that the tax rates in both bills discussed at the hearing would be among the lowest in the country. His bill sets the tax rate a little higher at 9%.

He also noted that Rowden’s bill allows casinos to deduct promotional play from revenues before paying taxes. Casinos don’t get a credit for promotional discounts offered on casino play.

That led Hoskins to ask Winter if allowing these deductions on gross revenues would reduce tax revenues to Missouri education. Winter agreed there was that potential.

Official league data

Luetkemeyer’s bill mandates official league data. Hoskins’ bill takes it a step further by also providing a 0.25% royalty fee on all bets placed to sports leagues.

Hoskins questioned Rowden about requiring official league data. Rowden agreed it merits conversation, but expressed his concerns with the concept.

“I want to make sure we don’t create an artificial market that doesn’t need to exist within a free market if we don’t have to,” Rowden said. “I think that would be my concern as it relates to data. But I’m open to a conversation for sure.”

The St. Louis Cardinals and St. Louis Blues testified in support of S 256 despite a lack of such language.

Hoskins also wants a fee for the University of Missouri to educate their student-athletes about gambling.

In-person or remote registration

Representing Caesars Entertainment, Regional Vice President John Baker asked for lawmakers to include an in-person registration requirement.

None of the Missouri sports betting bills currently have an in-person requirement for online sports betting accounts.

“What we advocate is the Iowa model. It’s an 18-month period where the casinos who have invested and have jobs in the community, hundreds of millions of dollars in properties that they’ve developed in these communities, have the opportunity to sign customers up in person for a period before you create the online registration process where you never have to go in anywhere …”

That was not the majority opinion of the Missouri Gaming Association. However, Baker indicated that there is dissent on the topic.

Last year, one Missouri lawmaker pointed out that some Missourians live up to four hours from one of the riverboat casinos, which would create a significant burden for them to participate in a legal activity.

In-person registration requirements tend to favor casinos best situated in population centers. That could give a competitive advantage to Caesars, which has one property Kansas City and another next to the St. Louis Arch.

Allowing sports betting outside stadiums

The idea of allowing sports teams to have more direct participation in sports betting is new to Luetkemeyer’s bill but not to Missouri.

One bill last year, from Rep. Dan Shaul, included the same language.

Luetkemeyer explained that his coming substitute will allow Missouri sports teams to create entertainment districts with sports betting around Busch Stadium (Cardinals), the Enterprise Center (Blues), Arrowhead Stadium (Chiefs), Kauffman Stadium (Kansas City Royals), St. Louis City Stadium (St. Louis City SC, under construction), and the Sprint Center.

“The proposed sports entertainment district concept would help the professional sports teams located here in Missouri to protect their rights and investments at and around their facilities,” Luetkemeyer said. “Similar laws already exist in Illinois and Washington DC.”

Photo by AP / Charlie Riedel
Matthew Kredell Avatar
Written by
Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

View all posts by Matthew Kredell