The Missouri House of Representatives is holding its first hearing on the issue of sports betting Wednesday in the House Budget Committee.
The committee will be discussing three sports betting bills introduced this year that seek to put The Show-Me State in position to regulate sports betting if allowed by federal law. Legal Sports Report spoke with the author of one of the bills, Rep. Bart Korman, ahead of the hearing.
Three bills inside Jefferson City, Missouri
In January, Korman introduced the first piece of legislation to authorize sports betting in Missouri, H 2320. It’s a basic, single-page bill that provides flexibility to the Missouri Gaming Commission to establish the standards and procedures for wagering on sporting events.
“I think it’s better to set it up in a way so the standards and procedures are done by people who understand them, and in conjunction with federal regulations, if there are any,” Korman said.
Rep. Justin Alferman followed with H 2406, which takes a more active role in establishing framework for regulation. Then the sports leagues got involved, with the NBA and MLB lobbying for the introduction of H 2535 by Rep. Dean Plocher, which has a companion bill from Sen. Denny Hoskins.
Here are key components of the three bills that will be discussed at Wednesday’s hearing:
- H 2320 (Rep. Korman): Takes a free-market approach by including operators licensed to offer daily fantasy sports in the state among those who would be permitted to take sports wagers, along with the state lottery and 13 riverboat casinos.
- H 2406 (Rep. Alferman): Limited to riverboat casinos, establishes a 6.25 percent tax on revenues as well as a $10,000 application fee and $5,000 annual administrative fee, and changes the definition of “gambling game” so that sports wagering is considered a game of skill.
- H 2535 (Rep. Plocher): Pays sports leagues an “integrity fee” of one percent of all sports wagers, while also providing the leagues access to bettor information and control over data rights. Sets tax rate at 12 percent.
Giving the sports leagues a cut
The “integrity fee” will surely be a hot topic of discussion at Wednesday’s hearing. As multiple states have been preparing for the possibility of a change to federal sports betting laws, the NBA and MLB have been asking for the fee in a number of states.
However, Nevada has offered sports betting for decades without paying such a fee. And, while one percent seems like a nominal figure, it’s actually about 20 percent of the revenue sports betting operators typically generate.
“There are some states that have sports wagering that is legal, and that integrity tax is not there,” Korman said. “I thought it’s kind of an interesting ask at this point in the game, and it will be interesting to see what folks think of that at the hearing.
“I don’t want to put Missouri in a competitive disadvantage by having too many additional fees where someone will just go across the state line to bet,” Korman added. “So I’m not sold on the idea of an integrity fee, especially since it is not being done in other states.”
What is needed from this hearing?
Wednesday’s public hearing is scheduled to start at 12:20 p.m. local time, and a live stream may be available from the “House Debate” link here.
The three representatives, all Republicans, will present their bills, then all interested parties are welcome to offer testimony in favor, opposition, or for informational purposes. Alferman is vice-chair of the House Budget Committee, and Korman is a member.
Missouri is scheduled to conclude its legislative session on May 18. Legislation enacted this session, if signed by the governor, goes into effect Aug. 28.
With the US Supreme Court expected to render a decision on Murphy v. NCAA this spring before concluding for the year – and a repeal of the Professional and Amateur Sports Protection Act that provides Nevada a monopoly on offering full, legal sports betting in the US a possible outcome – the legislature could need to pass a bill this session if it is going to be prepared.
“Because of our legislative timing, to compete with other states it would be great to get it done this year,” Korman said.
In order to have sports betting legislation passed within six weeks, this hearing is the first step to sorting out the differences in the bills and either choose one to push forward or find compromise among the proposals.
“It’s going to be tough, because of the conflicting language, to work out those details in a short time frame of about six weeks and get it to the governor’s desk,” Korman said. “There’s less to argue about in my bill because it’s basically just setting up the framework.
“I based the premise on, ‘Do you want to authorize Missouri to be in sports betting or not?’ Where some other bills might create more hurdles. I think keeping it simple is the best approach, especially with this short time frame.”