Missouri voters heading to the polls this week will decide the future of sports betting in their state.
Amendment 2 appears on the 2024 Missouri ballot after garnering more than 250,000 verified signatures as its prerequisite for certification. A Yes vote by the majority would amend the state constitution to include language authorizing single-game sports betting. A No result would maintain the status quo in which sports betting in Missouri remains limited to unregulated offshore websites and local bookmakers.
The battle to win voters attracted more than $50 million in contributions and ad buys from industry stakeholders on both sides of the issue, and polling still sees the question as a tossup at the ballot box.
Based on our analysis, a legal and regulated Missouri sports betting market has the potential to generate more than $4.5 billion in wagers and $500 million in gross operator revenue annually.
Missouri’s vital statistics
Missouri has a resident population of 6.15 million according to the latest census data, just inside the national top 20 with Maryland as its closest comp. Median household income of $68,545, however, puts the state well below the US baseline for that metric.
As far as geography goes, Missouri is nearly surrounded by neighbor states with legal online sports betting. Bettors in the densely populated St. Louis and Kansas City metro areas, in particular, have proximate access to competitive options in Illinois and Kansas. Those two cities alone are home to around 750,000 people and around 6 million including their suburbs.
The two short stretches of borderlands that adjoin Nebraska and Oklahoma frame the only corners of Missouri where crossing over to bet online is not currently an option. Nebraska remains limited to retail sportsbooks for now, while Oklahoma has yet to approve any relevant legislation or tribal compacts.
Missouri bettors are ravenous
The appetite for sports betting in Missouri has long gone unsatiated. The Show Me State was one of the first to take up proposed legislation even ahead of the repeal of PASPA in 2018, but lawmakers have so far been unable to get any of the dozens of bills over the line.
Now voters will try to do it themselves. As it stands today, many of those voters routinely travel out of Missouri to place wagers in one of the neighboring states with legal betting.
Geolocation leader GeoComply has already identified over 200,000 online sports betting accounts created by users who reside in Missouri. During the first three weeks of the NFL betting season alone, the company processed (blocked) more than 11 million location checks from devices located in Missouri trying to access legal sportsbooks elsewhere.
Wide world of Missouri sports
Missouri’s thriving sports scene would play a role in the future of its sports betting industry.
The state is home to professional sports teams in three of the four major US men’s sports, along with women’s professional soccer via the Kansas City Current of the NWSL. Two MLB teams and a spot in the collegiate SEC make Missouri a big baseball state, while local basketball fans have mostly adopted the Memphis Grizzlies as their de facto NBA home team. College football and basketball are both above average in local popularity, too.
Secondary sports also factor into the local landscape. Missouri plays host to annual PGA-sanctioned events for the Korn Ferry Tour and PGA Champions Tour, and the Illinois suburbs of St. Louis feature racetracks frequented by both NASCAR and INDYCAR.
Leveraging Missouri’s gambling industry
Gamblers in Missouri are currently served by 13 riverboat casinos, and the ownership groups already have experience with sports betting elsewhere in their portfolio. Penn Entertainment is very much the local leader, owning and/or operating five of those properties:
- Ameristar St. Charles
- Ameristar Kansas City
- Argosy Riverside
- Hollywood St. Louis
- River City
Boyd Gaming actually operates the two Ameristar properties, giving it access to the local market independent of Penn.
Caesars also has a large physical presence with three casinos in the state, as do regional players Affinity and Century with a pair of riverboats apiece. Bally’s rounds out the roster with its newly renovated facility in Kansas City.
These casinos see close to 30 million admissions per year and generate around $900 million in annual taxes on $2 billion in gross revenue. The American Gaming Association ascribes nearly 25,000 jobs and $5 billion in total economic impact to Missouri casinos annually.
Policy points for sports betting in Missouri
The proposed framework for Missouri sports betting would funnel the industry through its existing sports and gambling industries.
Under Amendment 2’s terms, professional sports teams and riverboat casinos would all be authorized to conduct retail sports betting. That creates room for 19 physical sportsbooks in the state, including potential brick-and-mortar locations at Arrowhead Stadium and Busch Stadium. Only a handful of other states allow this type of implementation.
Online betting would be slightly more limited, with casino operators restricted to one digital brand apiece. That appears to open up six online licenses across the 13 casinos, though there is some recent regulatory chatter that could expand that interpretation. The six qualifying sports teams would get one digital license apiece, too, and the proposed amendment makes room for two additional standalone online sports betting licenses to bring the likely total to 14 available slots.
The state would collect 10% of operator net revenue as taxes with no practical limit on the amount of promotional deductions allowed. Missouri gets extra credit for the allocation; after covering administrative expenses, all remaining proceeds would be used to support education and seed the state’s Compulsive Gambling Prevention Fund.
As is the case in a growing number of states, Missouri’s sports betting law would prohibit in-state college player props.
Missouri sports betting revenue outlook
Our aggressive modeling suggests that a mature Missouri sports betting market would be capable of generating as much as $4.59 billion in handle and $518 million in gross operator revenue annually — perhaps just outside the top 10 in the country for both. The deduction of promotional credits would reduce the long-term taxable base by about one-third, leaving around $35 million in state tax revenue as the upper bound.
Legislative researchers, meanwhile, expect up-front licensing fees of $12 million and conservative tax revenue between $0 and $29 million annually, depending on the level of promotional deductions. Expect first-year taxes, in particular, to be largely offset by those promos that lubricate initial customer acquisition.
Given the pace surrounding other recent launches and the geographic dynamics, Missouri’s market should ramp up to a state of near-maturity within that first full year of operation.
Neighboring states would conversely feel a small pulling force away from their markets, most especially Kansas and Illinois. Both are still growing vigorously this year, but a Missouri launch would visibly flatten their curves in the immediate aftermath.
Which brands would lead Missouri sports betting?
Bettors in Missouri would be spoiled for choice of their favorite betting platforms.
Penn’s footprint gives it a point of access for its underperforming ESPN Bet product, and a day-one launch might be just what the brand needs to start leveling the playing field with the leaders. Caesars and Bally Bet also appear to have native access to the prospective market via direct ownership.
Speaking of the leaders, DraftKings and FanDuel would no doubt find their way into the state. FanDuel appears to have a clear path to entry via its established partnership with Boyd. DraftKings notably relies on a Penn partnership for its access to Illinois, but that lone slot in Missouri is almost certainly spoken for. Along with third-place BetMGM, DraftKings might be a top contender for one of those two standalone licenses.
Century provides access for bet365 in Colorado, and it is reasonable to expect the same in Missouri, too. Affinity is something of a wild card, using antiquated William Hill to operate its sportsbooks in Nevada while searching for a new partner in Iowa to replace the now-defunct DRF Sportsbook.
Next steps after Election Day
Should the ballot measure succeed, regulators will begin taking the first steps toward licensing and launch. That includes the drafting of regulations, some of which may already have been casually underway over the last few years. At the very least, local regulators now have quite a large national playbook of sports betting policy to study from.
From there, everyone will be counting down the days to go-live. Considering the timetable for comparable launches, a midyear rollout figures to be within the realm of possibility for Missouri. That would leave enough time for an initial wave of stress testing and customer acquisition in the lead-up to next football season.
Should the ballot measure fail, it’s back to the drawing board for lawmakers and industry supporters. And it may take some time for the cloud of diminished public sentiment to clear the air for another legislative attempt.
For voters in Missouri, Tuesday is decision day on sports betting.
