Missouri Gov. Finds Tax Collection Problem With Sports Betting Proposal

Written By Adam Hensley on January 25, 2024 - Last Updated on January 29, 2024
Missouri Gov. Mike Parsons

As the push for legal sports betting in Missouri heats up, the governor’s office raised a question about tax collection.

Gov. Mike Parson‘s administration conducted a fiscal review of the proposed ballot initiative that would legalize Missouri sports betting. One of the biggest issues his team found regarded the omission of how the state will handle taxes and fees.

“Without the identification of an agency to collect the tax, no tax can be collected,” the analysis stated. “Due to wording in this (initiative petition), the Department of Revenue assumes this IP will not generate any revenue to the state.”

However, the ballot initiative proposed by the Missouri Pro Sports Coalition isn’t the only avenue for sports betting. Additionally, lawmakers introduced three bills that would legalize the activity as well. Thus, the ballot initiative is one of four ways Missouri sportsbooks operate in the near future.

Supporters say Missouri Department of Revenue has ‘indepedent authority’ to collect taxes

Not everyone has the same read as Parson’s team.

Winning for Missouri Education is a political action committee that backs the ballot initiative. Its spokesman, Jack Cardetti, defended the initiative. According to a report from the St. Louis Post-Dispatch, Cardetti clarified that the initiative gave the state’s Department of Revenue the authority to collect sports betting taxes.

“Both the Missouri Consitution and our statutes give the Missouri Department of Revenue independent authority to collect all taxes imposed by the law and deposit funds, which is exactly what they will do after this November when Missourians legalize sports betting and provide tens of missions in annual, dedicated funding for Missouri education.”

Specifically, Jefferson City attorney Chuck Hatfield penned the language on this ballot.

According to him, the lack of specificity wasn’t intended to create a loophole or cause any distractions. It was meant to give the state “flexibility.”

What would Missouri sports betting taxes look like?

This proposal would set a 10% tax on gross gaming revenue from sports betting. Tax revenue would directly fund the state education system.

Experts estimate that the 10% benchmark would lead to nearly $29 million in education funding — a nice boost to the state and its residents.

Right now, Missouri residents can cross state lines and legally gamble on sports in seven neighboring states:

  • Iowa
  • Illinois
  • Kentucky
  • Tennessee
  • Arkansas
  • Kansas
  • Nebraska

It’s unknown just how many dollars are leaving Missouri and going toward these states with their respective gambling taxes. But it’s certainly worth mentioning.

Most of the country has legal sports betting markets. Missouri is one of a handful of states without one. But there’s an appetite for sports betting within the Missouri border. And making sure those hypothetical tax dollars go back toward Missouri itself, and not other states, is key.

Questions around problem gambling treatment

Aside from tax collection, the report found issues with problem gambling efforts in the initiative.

Most states take a piece of the tax revenue and start a problem gambling fund. The fund usually helps states provide education, prevention and treatment for those with gambling problems.

With questions already surrounding the tax issues, this seemed to be the cherry on top. As a result, Parson’s team noted that the Missouri Gaming Commission would have no means to finance any sort of gambling addiction help.

“It should be noted that the commission is not expressly authorized under this proposal to collect any of the fees described in this proposal,” the governor’s analysis read.

Missouri professional sports teams continue their push for legal sports wagering

The coalition made up of Missouri’s six professional sports teams continues to be a massive leader in the push for legal sports betting.

The Kansas City Chiefs, Kansas City Royals, Kansas City Current, St. Louis Blues, St. Louis Cardinals and St. Louis SC comprise the coalition. FanDuel and DraftKings donated $500,000 to the PAC, too.

This coalition is behind the signature-gathering process in hopes of allowing residents to vote on the subject in November. They must get 8% of registered Missouri voters in six of eight districts must sign this petition.

In other words, the group needs more than 171,600 signatures to put the issue on the ballot later this year.

Sports betting has been a hotly contested topic in Missouri over the past few years. One vocal member of the Missouri General Assembly, Sen. Denny Hoskins tied its legality with video lottery terminals. Therefore, previous sports betting legislative attempts never crossed the finish line.

For the issue to appear on the ballot this year, a significant push must be made. And that’s what these teams are trying to do.

For example, the St. Louis Blues are asking fans to sign the petition at their home games this season.

“The citizens of this state have been forced to play shorthanded in comparision to  surrounding neighbors when it comes to having the ability to participate in legal sports wagering, sending valuable tac dollars over our borders instead of keeping them in-state to improve the lives of Missourians,” St. Louis Blues CEO and president of business operations Chris Zimmerman said.

Photo by AP Photo / Jeff Roberson
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Adam Hensley

Adam Hensley is a journalist from Des Moines, Iowa, with experience covering online sports betting and gambling across Catena Media. His byline has appeared in the Associated Press, Sports Illustrated and sites within the USA Today Network. Hensley graduated from the University of Iowa in 2019 and spent his college career working for the Daily Iowan’s sports department, both as an editor and reporter.

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