JEFFERSON CITY, Mo. — The Missouri General Assembly is looking for the right mechanism to establish legalized sports wagering in the Show-Me State, and three representatives presented their version to the House Budget Committee on Wednesday.
The bills are similar in that they legal sports betting in Missouri pending the outcome of the case before the U.S. Supreme Court, however, they differ when it comes to regulations, fees, and mobile wagering.
“This is happening overseas and on the black market,” Rep. Dean Plocher said. “Let’s bring this into the light and into Missouri.”
Plocher’s bill is similar to Sen. Denny Hoskins which has stalled in committee in the Senate. Rep. Justin Alferman’s bill is similar to Sen. Caleb Rowden’s which is moving forward in the Senate.
The common consensus of witnesses and bill sponsors was that sports wagering will eventually be opened up nationwide in America, that eventually, this will happen so they need to set up the way for it to take place in Missouri. However, they differed on the best way to set up that mechanism, though most were open to negotiating and having that conversation.
“We are here to have to input, to have the discussion. We are flexible. We just want to put the best bill for Missourians forward and I believe this bill is a good start,” Plocher said.
By far the simplest bill put forward was Rep. Bart Korman’s. The one-page document leaves additional regulations to the Missouri Gaming Commission. Because Korman’s bill simply adds sports betting to the legal gaming wagering, it would be taxed at the same rate as all other gambling.
The added flexibility of the bill is because no one knows if there will be strings attached to the Supreme Court’s decision or what is going to happen, according to Korman.
“We can get into arguing the details, like we probably will on two bills, don’t wanna trash those bills or anything, but you can argue a lot of the details as you saw in testimony, over two hours on one bill,” Korman said. “We only have one page to discuss, so we are not going to argue over small details on the regulation side of it. We are going to leave that up to the folks that understand it way more than probably anyone here understands it. Keeping it simple.”
While the other two bills the committee heard also put sports betting under the jurisdiction of the Missouri Gaming Commission they are much longer and much more complex than Korman’s proposal. Alferman’s and Plocher’s bills differ on fees, taxes, and regulation.
Plocher’s bill calls for 12 percent tax on net profits and a 1 percent integrity fee paid to the sports governing body.
The integrity fee got the most scrutiny in the hearing, with casinos and the gaming association adamantly opposed to it. They said that taking 1 percent off the handle — the total amount bet — would eat in to already slim profits.
“We are not talking about some insignificant sliver of money,” said Mike Winter representing the Missouri Gaming Association.
Roughly 90 percent to 95 percent of all money wagered at a sportsbook is paid to winning bettors, leaving 5 percent to pay taxes and other expenses. Winter used the Super Bowl as an example of why the 1 percent off the handle would not be a good idea.
Bettors in Nevada placed $158.6 million in bets on the Super Bowl, but the sportsbooks’ total win only amounted to $1.1 million, a hold percentage of just 0.7 percent. Under Plocher’s proposal, sportsbooks would have to pay the leagues one percent of $158.6 million, or roughly $1.6 million, more than wiping out all income from the event.
Major League Baseball is not tied to 1 percent as the figure, they are open to negotiating that. However, they are adamant that the fee is tied to the handle and not the casino’s profit.
“We really do not want to have a perceived interest in the outcome of any bet,” said Bryan Seeley, senior vice president of Investigations & Deputy General Counsel for Major League Baseball.
The fee will go to maintaining the integrity of the game and handling the increased risks the leagues take on with legalized sports betting. If there was a scandal it would cost MLB, their band and their clubs, tens of millions of dollars, according to Seely.
He also points out that the casinos would be profiting off entertainment MLB provides that they otherwise wouldn’t be compensated for.
Rep. Peter Merideth contends that legalized betting could increase interest, and thus profits, in the games.
”I’m not a big sports guy,” Merideth said. “But, I love March Madness. I love it because I have a pool. I love it because I have a bracket that I’m watching which are my picks. I can imagine a lot of people getting a lot more engaged and involved in watching sports that they are betting on.”
The third bill the committee heard testimony on was Alferman’s proposal which he modeled after Nevada. His bill doesn’t have a lot of the provision MLB would like to see — such as an opt-out provision for leagues and real-time data sharing amongst others — but it is backed by the Missouri Gaming Association and the casinos.
“It’s a good framework for sports betting,” said a representative for Penn National Gaming, who has two locations in Missouri.
The provision within the bill that gave pause, was the 6.25 percent tax rate. Supporters argued that this was modeled after Nevada.
It was pointed out that Nevada treats all gambling the same for their tax rate, so if Missouri was truly modeling it after that state sports gambling would be taxed the same as the rest of gambling in the Show-Me State.
The budget committee did not hold executive session on any of the bills.