Missouri Attempting To Figure Out Sports Betting

April 6, 2018
Missouri State Flag

Missouri has a tough task ahead of them. They are beginning the deliberation process of legal sports gambling. The state has 3 bills to weigh and each one has unique characteristic and outlooks on how betting should exist in Missouri.

Legal sports betting is still a somewhat novel concept in the state. There is gambling on riverboats and in brick-and-mortar casino locations and Daily Fantasy Sports is legal and regulated. However, the state is one of the 46 not allowed to host betting options due to the Professional and Amateur Sports Protection Act (PASPA), a federal ban.

One Missouri Representative introduced a bill in January regarding legal sports betting. This is called H 2320 and is sponsored by Representative Bart Korman. Korman’s bill is simple, which means it probably won’t make it through since legal sports betting is a complex issue. Korman’s bill gives the Missouri Gaming Commission the power to set up the legal framework for betting on sporting events. Korman’s approach basically shifts the responsibility to what he considers the most knowledgeable people to do so. He said as long as the procedures are in line with federal regulations it should work out. This bill would allow DFS operators to host betting options as well as the state lottery and 13 riverboat casinos.

Another bill was introduced through Representative Justin Alferman. This bill, H 2406, takes it a step further by establishing set procedures for the potential market. Alferman envisions betting being limited to riverboat casinos. He also included financial procedures like a 6.25% tax on revenue, a $10,000 license fee and a $5,000 annual fee for administrative costs. It seems odd that they would limit betting to riverboats, but that appears to be where the bulk of gambling activity takes place anyway. Legal online betting options would likely come soon after (in the event of legislation passing).

Finally, Representative Dean Plocher introduced H 2535, a bill that appeases the NBA and MLB on their quest for a stake in this new market. These 2 sports leagues have been lobbying around the country in pursuit of integrity fees (basically a 1% royalty for states), a data monopoly and the right to influence which events are eligible for betting. They have lost out in states like West Virginia, but Kansas recently passed a bill with slightly altered versions of their requests. This specific bill kept in the 1% integrity fee level and would give the leagues access to control over data.

It is hard to say which way the Missouri lawmakers will go. Many legislators are uneducated when it comes to how sports gambling works. They would be competing with licensed offshore markets, which some are not even aware of. That is what these hearings do—educate the lawmakers in hopes of finding the best solutions. There will likely be a fourth bill introduced by the end of the legislative session (May 18) that is similar to Kansas. This would mean terms like a .25% integrity fee, partial data rights and the ability for the leagues to ask for certain exclusions with betting on events.

The state has just over a month to figure this out. If they are able to pass a law, it will go into effect in late August. If New Jersey wins the SCOTUS case, expect Missouri to get the ball rolling.