YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
After failing last year to cross the finish line, legalized sports betting is back in the legislative lineup.
The Missouri House Emerging Issues Committee unanimously passed sports betting bills on Feb. 23 by State Reps. Dan Houx, R-Warrensburg, and Phil Christofanelli, R-St. Peters, that now head to the House Rules Committee. Christofanelli said his legislation, House Bill 581, is identical to House Bill 556, sponsored by Houx. He said the two bills, which are supported by every major league sports franchise in the state and most of the casino companies operating in Missouri, were rolled into one and will now be referred to as HB 556.
“It creates a legal and regulated framework for sports wagering,” Christofanelli said. “The goal here is that we adopt a commonsense approach to this issue.”
Sports betting is now legal in 36 states and the District of Columbia since 2018, when the U.S. Supreme Court struck down the federal law that barred gambling on football, basketball, baseball and other sports in most states. Six of Missouri’s border states have operational sportsbooks, including Kansas, which legalized the issue last year.
HB 556 would allow anyone ages 21 or older to place wagers on sporting events. People could do so at one of the state’s 13 casinos or by downloading a sports wagering app to their phone or computer and place bets from anywhere within the state. Each casino would be allowed to run a retail sportsbook and as many as three online platforms, also known as “skins.” Additionally, each professional sports stadium would be allowed to open a brick-and-mortar sportsbook and partner with one online platform, such as DraftKings and FanDuel.
State fiscal analysis of the bills projects sports betting would generate $6.6 million to $22.4 million in state tax revenue in the first fiscal year it is legal. That would expand up to $29.3 million a year in new tax revenue once the market matures in roughly four years. Money would go toward the state’s education fund, while regulatory duties for sports betting would fall under the purview of the Missouri Gaming Commission.
“What we’re legalizing is the ability for casinos to engage in these types of wagers,” Christofanelli said, adding casino gambling is a highly regulated industry. “They can partner with brands that can do the apps, but the sportsbook will be run by a licensed and regulated casino.”
Finding favor
State Rep. Bishop Davidson, R-Republic, is a member of the House’s emerging issues committee that voted in favor of the bills.
“I’m typically more of a free market guy. There’s a lot of things that I’m not involved in personally that I’m not terribly interested in regulating from a state perspective, on the one hand,” Davidson said, adding he isn’t a gambler. “On the other hand, there’s an opportunity to generate some revenue. We already allow gambling in certain instances throughout the state.”
Statewide trade organization the Missouri Gaming Association said in a statement it supports passage of HB 556.
“This bill authorizes sports betting without lumping in other controversial legislative proposals, which would prevent the bill from passing yet another session,” the statement reads. “We believe that Missourians are ready to join our nation’s capital and the 36 states that have passed sports betting and kept tax dollars in their state.”
Another sports betting bill, Senate Bill 30, sponsored by Sen. Tony Luetkemeyer, R-Parkville, also was passed Feb. 23 by the Senate’s appropriations committee.
However, the Senate committee did not advance Senate Bill 1, which sought to allow legal sports betting but also included a proposal to let the state lottery commission implement a video lottery terminal system in the state. Brick-and-mortar gaming facilities oppose the VLT system, officials say.
Debate in the Senate stalled last year involving a sports betting bill that included VLTs. Sports betting supporters such as Christofanelli believe VLTs should be a separate legislative issue. Davidson said he believes the fate of sports betting’s success this session could be tied to keeping VLTs out of the debate.
Market activity
Over Super Bowl weekend, Canadian-based GeoComply, which provides geofencing services for anti-fraud solutions in industries such as gambling, said it recorded 2.2 million legal sports betting geolocation transactions in Kansas. However, in Missouri, where the Super Bowl champion Kansas City Chiefs call home, state residents attempted to access legal sportsbooks in other states roughly 250,000 times and were blocked from betting.
Davidson said as he heard testimony during the committee hearing last month, the general perspective was there are a lot of Missourians engaging in sports betting.
“They either are doing so illegally or are crossing state lines. For those who live near the border, they’ll just cross over into Kansas or Illinois to do their sports betting,” he said.
Christofanelli said the illegal activity also leaves Missouri out of gaming revenue that otherwise would benefit education in the state.
According to data from the American Gaming Association, commercial gaming revenue – encompassing traditional casino games, sports betting and internet gaming – reached over $60.4 billion in 2022, up nearly 14% over 2021 and 38% higher than 2019. Of that total, sports betting brought in $7.5 billion, an increase of 73% from a year prior. Americans wagered $93.2 billion on sports last year, according to the AGA.
However, a November 2022 AGA report estimated Americans annually wager $63.8 billion with illegal bookies and offshore sites at a loss of $3.8 billion in gaming revenue and $700 million in state taxes.
While the legal and illegal sports betting markets are making billions, operators of local bars and pubs that regularly air sporting events are hoping to see increased business if state legislation passes.
Bryan Bevel, owner of The Pitch Pizza & Pub, said Missouri is missing the boat on sports betting revenue.
“We can fix a lot of our woes with the taxes we’re not getting,” he said. “People are gambling. You’d be a fool to think they’re not gambling. We might as well tax it.”
A 2021 study by market research company CGA by NielsenIQ found mobile sports betting is linked to increased spending in bars and restaurants. Roughly 70% of study respondents said they would order more drinks if watching a game they placed a bet on opposed to one they did not.
If sports betting were to become legal in the state, Bevel said he believes establishments like his could be among the beneficiaries.
“The sportsbooks would want you to promote it,” he said. “There would be money to be made as an establishment.”
Bevel said his pub’s six televisions are always tuned into sports, adding The Pitch regularly runs specials for Chiefs games, as well as the Super Bowl and the World Cup. He said people that follow fantasy football are among those who likely would stick around and order more drinks and food if they have a bet on a game.
“Even if it’s five bucks, 10 bucks, if they’ve got money on it, they’re more apt to linger longer,” he said.
Christofanelli said he regularly hears from constituents who are frustrated that lawmakers haven’t been able to pass the issue while other states have. HB 556 still needs to be referred to a rules committee and passed there before it can hit the House floor for consideration. He’s hopeful that can happen and be voted out of the House within the next few weeks.
“Our job is to try hard until the gavel falls on the end of session,” he said. “We’re going to keep pushing through and I remain ever hopeful about its prospects.”
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