Missouri Legislature Holds Hearings on Online Sports Betting Bills

Kansas is currently reaping the economic benefits of cross-border traffic from Missouri residents who often stop to place wagers before returning home.

Last Updated: Feb 10, 2023 4:09 PM ET Read Time: 4 min
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On Wednesday night, a scant four days before the home state Kansas City Chiefs take on the Philadelphia Eagles in the Super Bowl, the Missouri House Emerging Issues Committee opened public hearings on two bills that would introduce legal sports betting in the state. 

House Bill 556 — sponsored by Rep. Dan Houx, R-Warrensburg, and House Bill 581, sponsored by Rep. Phil Christofanelli, R-St. Peters — are identical in nature and mark the state's most determined effort yet to pass betting legislation. 

Both bills have the backing of every major league pro sports franchise in Missouri, and many team representatives spoke in favor of the legislative measures at the hearing. The bills are also supported by most of the state casino operators.  

No action was taken on the bills during Wednesday's hearing, and committee Chairman Bill Hardwick (R-Waynesville) declined to say when a vote would be held to forward a unified sports betting bill to the full House prior to final reading in the state Senate.

Rep. Houx has been campaigning for three years to legalize retail and online sports betting in Missouri as have other state lawmakers. Last year, it seemed certain that the state would finally approve such legislation until a last-minute amendment to legalize unregulated video slot machines scuttled the attempt.

The odds are heavily in favor of passage this time around, given that Kansas went live in September and saw Missourians cross state lines en masse to wager in the Jayhawk State. In his remarks to the committee, Rep. Christofanelli said that his bill would stop an outflow of taxpayer dollars to Kansas and other neighboring states — Illinois, Iowa, Tennessee, and Arkansas — where sports betting is legal.

The frustration felt by Missouri bettors is merely compounded by that of state legislators who are seeing the millions of dollars in potential state tax revenue flow into Kansas rather than into local state coffers.

"The big thing that I want to bring to the committee here, this is already happening in the state," said Houx in his opening remarks to the House Emerging Issues Committee. "We are missing out on taxpayer dollars and residual taxpayer dollars, meaning people go across state lines not only placing bets but spending money on other things, gas, dinner, that type of thing."

In 2022, the SB1 sports betting bill sponsored by State Senator Danny Hoskins died in the Missouri Senate on the final day of last year’s legislative session in May due to a VLT amendment.

Houx's new proposed legislation, HB 556, is identical to his 2022 bill, and he has expressed confidence that this time the legislature will finally get the job done for the future of sports betting in Missouri

Key provisions of House bills

  • A 10% tax rate on net sportsbook revenue (adjusted gross revenue).

  • Sportsbooks can deduct 100% of promotional costs during the first year of operation; this deduction decreases by 25% annually until it reaches zero in year five.

  • Pro sports franchises can each partner with one online sportsbook.

  • Casinos are allotted three online skins apiece up to a maximum of six per casino operator.

  • Each sportsbook will pay a $150,000 interactive sports wagering platform license fee, renewable on an annual basis at $125,000.

  • Casinos will pay an initial application fee of $100,000 for a retail sports betting license and an annual renewal fee of $50,000.

  • Retail sportsbooks will be allowed only at Missouri’s 13 riverboat casinos.

Under the terms of each bill, licensed sportsbooks and casinos would fall under the jurisdiction of the Missouri Gaming Commission which currently regulates riverboat casinos and charity bingo games. 

Kansas City's Super Bowl appearance adds impetus to sports betting bill

The post-season victories registered by the Kansas City Chiefs have compounded the frustration of Missouri bettors who are obliged to travel out of state — usually to Kansas or Illinois — to place bets in the run-up to Super Bowl Sunday.

"With geofencing today, we can see people crossing the Missouri River and the Mississippi River in St. Louis at a red light, it turns green, they turn around at the next exit and drive home," said Houx last September after Kansas went live.

But the twin absurdity of the inconvenience to state residents and the loss of tax revenue to the state treasury may finally compel Missouri lawmakers to finally pass legislation to legalize online sports betting. 

"It does pain me that people are going to go to that wretched state and spend money," said Missouri Senate President Pro Tem Caleb Rowden (R-Columbia), who summed up the mood of many state legislators with his distinctly un-neighborly reference to Kansas. 

At present, Kansas is reaping the economic benefits of cross-border traffic from Missouri residents who often stop to not only place wagers, but also take the time to spend money in shops, bars, and restaurants before returning home. 

Missouri sports bettors go up against geoblocking

On January 29 when the Kansas City Chiefs defeated the Cincinnati Bengals to earn their third trip to the Super Bowl in the past four years, more than 136,000 transactions were blocked on game day.  

During the entire NFL season, there were 8.7 million attempts made via 221,000 Missouri accounts to access out-of-state legal sports books, according to data from GeoComply, a provider of geofencing services for Kansas sportsbooks.

"(Missourians) are gonna go watch the game at some sports bar in Kansas — Buffalo Wild Wings, whatever it might be, and inject money into those local economies when they could be doing it here in our state," said Missouri state Rep. Kurtis Gregory (R-Marshall).

A fiscal analysis of the Houx and Christofanelli bills estimated that legal sports betting in Missouri will contribute between $6.6 million and $22.4 million in tax revenue during the first twelve months following legalization. This amount is projected to increase to a range of $21.6 million to $29.3 million by year five.

Pro sports athletes ask for amendments to House bills

The Missouri House Emerging Issues Committee also heard from Steve Fehr, lawyer to the National Hockey League Players’ Association (NHLPA), who requested that Reps. Houx and Christofanelli amend their bills to include provisions to safeguard players and their families.

There have been limited incidents involving angry bettors venting their frustrations on pro athletes whose play during sporting events adversely affects the outcome of wagers on point spreads or performance.

"We would like to support the bills but we think there are some things you should do to make the bills better, safer and fairer," said Feher in his remarks to the committee on Wednesday.

Feher told the committee that several states — Virginia, Illinois, and Massachusetts — had already introduced protective measures at the request of professional sports leagues.

“Our concerns are about player safety. There are things we think you can do to help concerns about interactions between disgruntled fans and players and their families. At the very least, you should have ... enabling language that will allow the Missouri Gaming Commission to work toward that goal."

An example of bettor abuse occurred back in December when Josiah Allick, a senior forward on the University of New Mexico men’s basketball team, was the subject of a torrent of abuse on social media by bettors who were angry that he had missed two late free throws in a 76-75 win over Wyoming in which the team failed to cover the -1.5 spread.

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