Amendment 2 aims to legalize sports gambling

While Missouri legislators in recent years have failed to agree on a way to legalize sports betting, voters will soon have their opportunity to decide its fate.

Amendment 2 is among issues on the Nov. 5 general election ballot and proposes the legalization of sports betting in the state. If passed, Missouri would join 38 other states and the District of Columbia to allow some form of sports betting. A “yes” vote would allow people in Missouri over 21 years old to place bets on professional and collegiate sports games in casinos and online apps.

If legalized, the sports betting industry would be regulated by the Missouri Gaming Commission, the agency that also oversees the state’s 13 casinos. The ballot issue sets the tax rate on betting revenue at 10% – a number that can’t be amended without another constitutional amendment.

According to the fiscal note from the state auditor’s office, tax revenue could reach up to $28.9 million annually. The state Gaming Commission estimates the total adjusted gross revenue for sports wagering in Missouri will be $63.5 million for its first year – or roughly $6.3 million from the gaming tax; $179.7 million for its second year – nearly $8 million in gaming tax; and $245.6 million in year three, which would bring in roughly $24.5 million from the gaming tax.

By year five, the state estimates sports betting could generate nearly $29 million in gaming tax revenue. Of that total, $5 million would be designated for a fund that addresses gambling addictions. The remaining money is for public schools and higher education, proponents say.

“We absolutely could use more investment in our public schools, and this will be another tool in the tool belt,” said Jack Cardetti, spokesperson for Winning for Missouri Education, the group behind Amendment 2 that also successfully got the issue on the ballot after gathering enough signatures to qualify.

The sports betting initiative was launched late last year after major sports teams and casino companies were frustrated by the General Assembly being unable to pass legislation on the issue. Multiple attempts to legalize sports betting in Missouri since 2018 – when the U.S. Supreme Court lifted a ban that previously limited sports wagering to Nevada – have made it past the House and died in the Senate due to a lack of action.

“Year after year, politicians would debate this and other issues in Jefferson City, but it never got done,” Cardetti said. “And every single day that we don’t have this policy in Missouri, we know the Missourians are still betting on sports. They’re either doing that on illegal offshore websites, or thousands of Missourians are traveling to one of our seven neighboring states that has sports betting to place bets – neither of which give any benefit to Missouri.

“So now is the time we need to actually capitalize on this opportunity and make sure that we have sports betting that actually benefits the citizens of our state.”

In disagreement
Supporters and opponents disagree on how much tax revenue sports betting could bring to Missouri education.

Brooke Foster, spokesperson for Missourians Against the Deceptive Online Gambling Amendment, said the campaign by Winning for Missouri Education is “disingenuous.”

“We’re kind of opposed to how it’s being extrapolated out in TV ads saying millions and millions for education, which according to the fiscal note itself is just very, very, very unlikely to happen,” she said. “Our key issue is just being honest about what this measure will and won’t do for education.”

Sports betting companies FanDuel and DraftKings are both donating a significant amount of money in support of the amendment. According to the Missouri Ethics Commission, DraftKings has donated over $13 million to the Winning for Missouri Education campaign since mid-August, with an additional $6.5 million coming from FanDuel.

Foster said a major argument against Amendment 2 is that proponents of the measure, such as FanDuel and DraftKings, would be able to make tax deductions before sending any money to the state.

“They’re able to basically subtract anything that they give out as a promotion. If someone is doing online sports betting and they’re given $100 in free play, then that $100 comes off the total tax before submitting it,” she said of money from the sports betting companies. “They’re also able to write off their federal taxes, and they can write off about $5 million that they’re paying into the Missouri Problem Gambling fund. So, kind of the very last step on that timeline is education.”

Even if that top amount of nearly $29 million in gaming tax revenue noted in the auditor’s fiscal note were generated, Foster said the amount would equate to about $30 per student in the state.

“Even if that top number comes true, it’s really, really minimal, and it doesn’t square with what they’re saying in their ads, which is raising teacher pay and all of these things,” she said.

Cardetti said the auditor’s fiscal note is typically conservative, pointing to when recreational marijuana was on the election ballot in 2022. In that fiscal note, it said state governmental entities estimate annual revenues of at least $40.8 million. According to state data, marijuana sales tax revenue in 2023 was $67.3 million.

“There’s a history here of the auditor telling Missourians what the fiscal note is, but it’s usually very conservative,” he said, noting the Missouri Gaming Commission used sports wagering data from Indiana as a comparison when calculating tax revenue estimates.

Indiana total adjusted receipts from sports wagering, which includes both retail and online, was $84.9 million for 2020, $240.5 million for 2021 and $328.6 million for 2022, according to the Missouri auditor’s fiscal note.

“The problem being Indiana started their sports betting program right when COVID was hitting. So obviously that had an impact on the numbers,” Cardetti said.

The legal sports betting market launched in five new states in 2023: Kentucky, Maine, Massachusetts, Nebraska and Ohio. That expansion helped increase sports betting revenue to over $11 billion in 2023, a 46% year-over-year increase from 2022, according to the American Gaming Association. In total, Americans bet a total of over $121 billion on sports in 2023.

Increased interest
Sports are a strong draw at Springfield eatery Harbell’s Grill & Sports Bar. Jared Stevenson, who took over ownership of the downtown business from David Bauer at the start of the year, estimated 60%-70% of those who visit the restaurant have interest in watching sports when they dine or drink.

“Football is absolutely nuts. We get full, packed houses for all football – college and NFL,” he said, adding the St. Louis Cardinals, St. Louis Blues and college basketball’s March Madness tournament also are big draws.

Sports are constantly on the 14 TVs at Harbell’s and game-day specials are frequently offered, Stevenson said.

“It’s so important, I have every streaming service you can think of,” he said. “That way I can show every single game, no matter what it is. I don’t care if it’s women’s fencing in China at 2 o’clock in the afternoon. If there’s a game, I will show it.”

A supporter of Amendment 2, Stevenson said he doesn’t gamble on sports anymore, but he knows plenty of people who come to visit his restaurant do. If the amendment were to pass, it would likely generate more food and drink sales for his eatery and other sports bars around the state.

“When people are gambling and stuff, it keeps them here in their seat for longer,” he said. “They spend more money; they’re more engaged with the game.”

Noting Missourians are already gambling on sports – be it illegally online or by driving across to states like Kansas and Illinois, where it’s already legal – Stevenson said he believes sports wagering is going to get legalized here sooner or later.

“They might as well just go ahead and do it. Just like weed being legalized, there’s people against it, but then all of a sudden you get a bunch of tax revenue and that starts going to the schools and improving your roads, and people go, ‘Oh, you know what, actually, it’s not such a bad thing.’”