Posted on: December 5, 2024, 12:41h.
Last updated on: December 5, 2024, 12:57h.
On Thursday, Missouri formally became the 39th state to legalize gambling on professional and college sports. The news comes after state election officials certified the 2024 sports betting ballot referendum.
The November gaming question before Missourians narrowly went in the pro-sports betting side’s favor. Missouri Secretary of State John Ashcroft’s office confirmed that Amendment 2 passed with 50.05% support.
A total of 2,954,343 votes were cast, with 1,478,652 in support of legal sports gambling to 1,475,691 opposed. Fewer than 3,000 votes determined the outcome.
With Amendment 2 passing, legal sportsbooks will come to Missouri next year. The Show-Me State will join seven of its eight neighboring states in regulating sports betting.
Kansas, Nebraska, Iowa, Illinois, Kentucky, Tennessee, and Arkansas are home to legal sports wagering. All but Nebraska have both in-person and online sports wagering. Nebraska only permits in-person bets. Oklahoma is the only state that shares a border with Missouri that continues to outlaw sports betting.
Another gaming question Missourians answered last month was a push to allow a Bally’s casino at the Lake of the Ozarks. That question, however, was easily defeated.
Forthcoming Market
The 18th most populated state with about 6.2 million people, many of whom are sports-obsessed fans of Missouri’s six professional franchises in Kansas City and St. Louis, the sports betting industry spent heavily to bring the state into legalization.
Total campaign spending on Amendment 2 was approximately $55 million, with DraftKings and FanDuel accounting for nearly $41 million of the pro-sports betting funds. Caesars Entertainment spent about $14 million in trying to defeat the sports gambling question.
Caesars opposed Amendment 2 because it allows DraftKings, FanDuel, and other online sportsbooks to seek mobile wagering licenses without any physical investment in the state. Caesars runs three casinos in Missouri — Harrah’s North Kansas City, Horseshoe St. Louis, and Ise of Capri Boonville.
Next year, after the Missouri Gaming Commission determines its sports betting rules, the state’s 13 casinos will be able to seek retail and online sports betting licenses. The state’s professional sports stadiums and venues will be afforded the same opportunities — a single retail sportsbook license and one online skin.
Five-year licenses cost $500K for online books and $250K for physical sportsbooks. Missouri will collect 10% of the net revenue. The first $5 million will be set aside for the state’s Compulsive Gambling Prevention Fund. The remaining sports betting tax windfall will support K-12 public and higher education.
Along with the casinos and sports venues, Amendment 2 authorizes two fully remote online sportsbook permits untethered to a riverboat or stadium/arena.
Financial Benefit
State budget officials expect Missouri to receive $11.75 million in immediate money from Amendment 2 after licenses are issued. That will more than offset the state’s one-time startup costs of $660K in fielding studies to craft the regulations that will govern the expanded gambling and a projected annual regulatory cost of $5.2 million.
Moving forward, the state concedes it isn’t exactly sure how much tax revenue sportsbooks will deliver to Jefferson City. That’s because Amendment 2 allows licensed sportsbooks to deduct free play and promotional credits up to 25% of the book’s monthly “total cash and cash equivalents received.”
“Because the proposal allows for deductions against sports gaming revenues, they estimate unknown tax revenue ranging from $0 to $28.9 million annually,” Amendment 2 read regarding the state government’s financial tax benefit estimate.
