Missouri voters will head to the polls in less than six weeks to choose, among other issues and races, whether to pass a constitutional amendment to legalize sports betting.
The measure has the support of the two leading gubernatorial candidates and the Show Me State’s largest newspaper.
On Wednesday, the St. Louis Post-Dispatch posted an editorial supporting, albeit tepidly, the Amendment 2 measure that will appear on the Nov. 5 ballot. The paper called the proposal “flawed,” citing the 10% tax on operator revenues that allows operators to deduct a portion of promotional credits and the federal excise tax from its receipts. The editorial board also said Kansas sports betting has been “a revenue disappointment” since operators launched there two years ago.
However, the paper also laid the blame on Missouri state lawmakers, who repeatedly failed to pass a bill with a higher tax.
“In a real way, continuing to outlaw sports betting here is nothing other than a declaration that Missouri refuses to regulate and tax an activity that will continue happening regardless of what state law says,” the Post-Dispatch’s editorial board wrote. “That’s dumb.”
That endorsement came just days after Republican Lt. Gov. Mike Kehoe and Democratic state Rep. Crystal Quade both spoke in favor of Amendment 2 at a gubernatorial debate held as part of the Missouri Press Association’s annual convention.
The tax dollars would be mainly used to bolster funding for education across the state. In a statement Tuesday, Winning for Missouri Education, a committee supporting the measure that’s backed by both FanDuel and DraftKings, noted that both major party candidates have called for raising educator salaries.
Report: MO Sportsbooks Would Generate $105M For Education
Missouri is nearly surrounded by legal sports betting states. Of the eight that border it, only Oklahoma has not legalized it. Despite the inaction in Missouri, many residents in the state wager through offshore sportsbooks or local bookies. In the Kansas City area, some residents will cross into Kansas, where bettors can utilize such licensed operators as Caesars Kansas Sportsbook and BetMGM to make wagers on the Kansas City Chiefs or their other favorite teams.
In mid September, researchers from Eilers & Krejcik Gaming produced a study for Winning for Missouri Education to determine what the market would look like in the state if Amendment 2 were to pass in November. According to the report, Missouri sports betting would generate a handle of $3.4 billion during the first year, with that figure rising to $4.9 billion by the fifth year. In total, bettors would wager about $21.8 billion across the first five years.
Operators would earn $335 million in the first year and approach $560 million by the fifth year. Using those numbers, Eilers & Krejcik estimated the state would receive nearly $134.4 million in taxes during the first five years, of which $105 million would go toward education. The remainder would cover regulatory costs and an annual $5 million contribution to the state’s Compulsive Gaming Prevention Fund.
The report’s figures paint a brighter start for Missouri than the state’s fiscal note accompanying the sports betting amendment. That analysis relied strictly on Indiana sports betting revenues, with the state citing its similar-sized population and other factors for the comparison. Missouri officials estimated operators would earn $63.5 million in first-year revenues and almost $180 million in the following year.
During a call with reporters last week, Eilers & Krejcik Managing Director for Sports and Emerging Verticals Chris Krafcik pointed out that the state’s analysis relied on Indiana data from 2020, when sportsbooks were impacted severely by the COVID-19 pandemic.
Who’s For And Against Missouri Sports Betting Amendment
While FanDuel and DraftKings are funding Winning for Missouri Education, they’re not the only gambling company involved in the issue. One prominent operator has come out against the amendment.
Earlier this month, Missourians Against the Deceptive Online Gambling Agreement submitted paperwork with the Missouri Ethics Commission to run a campaign to defeat the measure. It is airing commercials critical of Amendment 2, arguing that it will not provide a significant amount of revenue for the more than 550 public school districts and charter schools across the state.
The anti-Amendment 2 group reported receiving more than $4.1 million in funding this month. All of that came from Caesars Entertainment, which operates three casinos in the state. Some gaming insiders have told BetKansas that casino operators are not supporting the Missouri measure because FanDuel and DraftKings could receive untethered licenses. That would mean the two sports betting giants would not need a casino partner to get market access.
Jack Cardetti, a spokesperson for Winning for Missouri Education, said on last week’s call that he had not heard whether other casino operators would join Caesars in fighting the measure. Regardless, that won’t change the approach by supporters over the next six weeks.
He added that people cross the state lines into Illinois and Kansas every day to make their bets, including action online with Kansas sportsbook apps.
“So that’s valuable revenue that our current public policy is pushing away from the state of Missouri,” Cardetti added. “Missourians are already betting on sports betting. We’re not getting into the benefit.”
During the petition drive to get the proposed amendment on the ballot, FanDuel and DraftKings combined to contribute more than $6.5 million to the effort. The two sports betting giants have increased their involvement now that Missouri voters will decide whether to legalize sports betting. Since Aug. 15, they poured in more than $15 million into the campaign, with FanDuel spending $6.5 million and DraftKings giving slightly more than $8.5 million.
Emerson College Polling surveyed 850 likely voters in September and found that 52% plan to vote for legalizing sports betting. That’s more than double the 25.3% who said they’d vote no, and the remaining 22.7% of voters said they did not know yet. The survey’s margin of error is 3.3 percentage points.
USA Today Network photo by Alice Mannette/Hutchinson News
