Missouri Sports Betting: Bill Clears House Committee

KANSAS CITY, MO - NOVEMBER 11: Members of the United States Armed Forces run on to the field carrying flags representing the country and the branches of military for the Veterans Day weekend ceremonies prior to the game between the Kansas City Chiefs and the Arizona Cardinals at Arrowhead Stadium on November 11, 2018 in Kansas City, Missouri. The NFL is honoring Veterans Day across the league today. (Photo by Jason Hanna/Getty Images)

One major hurdle that had to be cleared prior to sports betting being legalized in the state of Missouri was traversed on Monday, April 15.

HB119, which was first filed on Dec. 3, 2018, by Representative Cody Smith (R-163) cleared a House committee and now awaits scheduling for the full House to debate the merits of the bill.

If the bill becomes law in its current state, it will be an unprecedented framework for legalized sports betting. The bill regulates legal wagering on sporting events to vessels on water only. There are no provisions for online bets in the bill. Furthermore, it would require legal sports books in the state to pay 0.25 percent of their handle to the professional sports leagues whose games are bet upon, and 0.25 percent to the NCAA.

Books would also have to pay 0.60 percent of their handle to a fund that is designated to bankroll construction, renovations, and repairs to privately-owned sports stadiums in the state like Busch Stadium, the home of the St. Louis Cardinals.

None of the legal books in any of the other states which have regulated sports betting are held to these standards. Asking legal sports books to give up 1.1 percent of their handle would not only be unprecedented but could actually work to keep a lot of the action in the state going through illegal channels instead.

The exorbitant taxes and restrictions on where bets can be placed mean the cost of operating a legal book will likely be passed on to customers. That will put legal books at a disadvantage compared to illegal ones that aren’t paying any taxes out of their handle and can offer a more competitive product not only in terms of cost but convenience. Many illegal bets are currently placed online. Additionally, paying a full percent of handle to leagues like MLB and the NCAA will subtract from potential revenue the state will receive from legal sports betting.

The bill as is would be a boon for leagues like the NFL and NHL, which have a presence in the state with the Kansas City Chiefs and St. Louis Blues. Not only would they benefit from the 0.25 percent of handle being paid out by books but also when it came time for new stadiums, they would most certainly be the benefactors of that 0.60 percent tax fund. If bettors gravitate toward legal books, that is.

It’s currently unclear what chances the bill has in its current form to be ratified by the full House, much less the Missouri Senate or signed into law by Gov. Mike Parson. Considering the fact that these facets of the bill don’t currently exist in any other states’ legal frameworks, this bill may be headed for a major rewrite or failure to pass.

With four teams from the four major professional leagues and one major college athletics program in the state, the probability that there is robust illegal betting ongoing in Missouri is high. If the framework presented by HB119 becomes law it’s likely that much of that activity will stay with the illegal books.