Missouri Sports Betting Bills Dig Up Integrity Fee From The Ashes

Posted on December 9, 2019 - Last Updated on December 8, 2019

Two prefiled Missouri sports betting bills in the Senate include what operators might hate the most: integrity fees.

SB 567 from Sen. Denny Hoskins calls for the Missouri Lottery Commission to oversee sports betting with 0.25% of handle paid to the leagues.

SB 754 from Sen. Tony Luetkemeyer seeks 0.75% of handle to be paid to the leagues. The bill would put the Missouri Gaming Commission in charge of regulation.

The bills are similar to ones that died in committee last year.

It’s slightly surprising to see the integrity fee back in those two bills after operators met with the House’s Special Interim Committee on Gaming in October. Chairman Dan Shaul said it was clear all in attendance were against any sort of mandated payment to the leagues.

The committee, however, did not say where it stood on mandated league payments when it released its opinion earlier this month. Nearly 40% of US states hold some form of sports betting law and none have accepted the money grab of an integrity fee.

Tax rates high with integrity fee

The addition of integrity fees bumps up taxes paid by operators significantly.

A handle tax of 0.25% is typically equated to about 5% of revenue. With SB 567 proposing to tax revenue at 9%, the effective revenue tax rate shoots up to 14%. SB 754 calls for a 6.25% revenue tax. That makes the effective revenue tax rate an unwieldy 21.25%.

Both are relatively high, though not nearly as high as Pennsylvania‘s effective revenue tax rate of 36%.

The two MO sports betting bills share something positive in common as well. Both call for mobile sports betting with no in-person registration requirement.

Missouri special committee findings

In short, the committee wants Missouri sports betting legalized so it doesn’t lose revenue to other states, according to the committee’s report.

That’s already starting to happen, according to officials from Boyd Gaming. Boyd has customers from Missouri traveling to its Iowa casinos for football betting on Saturdays and Sundays.

That competition will ramp up next year with neighboring Illinois and Tennessee launching sports betting as well.

One operator or many for MO sports betting?

The committee also stated it is interested in mobile gaming and “creating a level playing field insofar as that is possible.” While vague, that could be interpreted as ensuring there isn’t a monopoly, which can occur with lottery oversight.

Finally, the committee said it’s unknown which regulator would be best suited from an economic standpoint, which could include a new agency altogether. The main goal should be avoiding unnecessary competition between the agencies and getting revenue for education, the committee found.

Missouri would not be the first state to see progress stop over a fight about who regulates the activity. Last year, Ohio saw its legislation stall over a similar battle.

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Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

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