JEFFERSON CITY, Mo. — There are several bills filed in the General Assembly that would legalize sports betting, but SB 1009 and SB 1013 seem to be getting the most attention. One is backed by Major League Baseball, along with the Kansas City Royals and St. Louis Cardinals, the other is backed by Penn National Gaming and the Missouri Gaming Association.
While both pieces of legislation have the same intent, legalizing sports wagering, the bills differ on taxation, regulation, and a fee to the sport’s governing body.
“If sports betting is going to become reality in Missouri, we fully support Senate Bill 1013,” said Bryan Seeley, senior vice president of Investigations & Deputy General Counsel for Major League Baseball. “It installs some of the strongest consumer protection and sports integrity requirements found in any betting market, and it is the only bill under consideration in Missouri that protects our fans and our games.”
Under the bill presented by Sen. Denny Hoskins, the governing bodies of sports would receive 1 percent of all bets. This administrative fee pays for the sport’s governing body’s cost of maintaining the integrity of its sporting events.
“Casinos are going to be able to profit from the product we put forward,” said Seeley. “It’s reasonable for casinos to compensate the leagues for the additional costs we will incur from increased integrity monitoring and investigations and the huge risks our business will be taking on – as any scent of scandal will damage us, not the casino – and to compensate us for the casinos benefiting from our product, which is simply a fair business practice.”
The casinos commissioned a report that notes after paying taxes to the state and after remitting a fee to the sports leagues, casinos are set to make anywhere from $130 million to almost $400 million in revenue from sports betting, a major new windfall the casinos will enjoy while taking none of the risks the sports leagues will endure, according to Seeley.
Jeff Morris, vice president of public affairs & government relations for Penn National Gaming, said casinos will be working on thin profit margins concerning sports waging. 95 percent of all money wagered at a sportsbook is paid to winning bettors, leaving 5 percent to pay taxes and other expenses.
He used Nevada as an example why the 1 percent fee would not be economical for casinos. Earlier this month, 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 the leagues’ 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.
“The most egregious provision is the so-called ‘integrity fee’ that would pay the leagues 1 percent of the total amount wagered, or roughly 20 percent of revenues after winnings are paid out to bettors,” Morris said. “No jurisdiction in the world has an integrity fee. Sports wagering has operated successfully for close to 70 years in Nevada without one.”
The integrity fee is the main provision in Hoskins bill the Missouri Gaming Association is opposed to.
“The regulatory framework is going in the right direction, we may differ on some of the details, but we do agree it needs to be regulated by the [Missouri] Gaming Commission,” said Mike Winter with the Missouri Gaming Association.
According to Kevin Uhlich, senior vice president for the Kansas City Royals, SB 1013 “contains the necessary, powerful combination of extremely strong integrity protections and mandated requirements for casinos to work closely with our league to monitor betting for potential manipulation.”
Hoskins’ bill also creates penalties for those found guilty of match-fixing and any action associated with the corruption of a sporting event. No athlete, coach or official would be able to bet on their own game. It also sets requirements for real-time recordkeeping and data sharing, age verification, and combating false or deceptive advertising.
PNG raises concerns with two provisions they refer to as “intrusive”: the ability for sports leagues to opt-out of forms of betting and the use of the league’s’ official data.
“We oppose the leagues’ unilateral authority to deny video and game data to any entity or person or restrict, limit, or exclude wagering on sporting events by sports book operators, with no requirement to justify or explain these actions,” said Morris.
He calls the provision that sportsbook operators only utilize data and associated video provided by the leagues, “an attempt to create a new revenue stream for the leagues.”
“They already stand to benefit greatly from increased viewership of their product, as has been the case overseas where sports betting is legal, with soccer’s English Premier League: its franchises are among the most lucrative in all of sports,” Morris said.
Instead of Hoskins’ bill, PNG and the Missouri Gaming Association are supporting Sen. Caleb Rowden’s SB 1009, which is built upon the framework of Nevada’s statute.
“It’s a bill we think does put a proper regulatory framework in place, it does require that any of the sports waging be done through a licensed casino, and the tax rate of 6.25 percent, we believe, is a more realistic tax rate for sports wagering,” said Winter.
“It includes reasonable tax rates and fees so that Missouri has the opportunity to maximize the revenue potential of sports wagering. This bill also includes significant provisions to ensure the integrity of sports betting and gives the Missouri Gaming Commission complete control of regulatory oversight, which it has done successfully for 25 years,” Morris said.
But MLB baseball doesn’t feel Rowden’s bill offers the same strike regulations and protections.
“Senate Bill 1009 does not even come close to meeting the high standard necessary to shield baseball and its fans from potential corruption,” Seeley said. “For instance, if Senate Bill 1009 were to become law, a player could walk into a casino and place a bet on a game he is playing in later, and the casino would not be obligated to report this to us. Senate Bill 1009 and its lack of safeguards, lack of required reporting, lack of data collection and lack of required collaboration with the sports leagues would open the market to fraud and abuse.”
The MLB is not advocating for the passage of sports betting legislation but wants to ensure that consumers are protected and the integrity of the game is safeguarded.
PNG is pushing for a fair and viable sports wagering law will also reduce participation in illegal, unregulated, and untaxed operations.
“It’s important to note that sports betting can become an attractive amenity at the state’s casinos but should not be expected to drive significant gaming or tax revenues. It will help drive visitation to the facilities where customers may purchase additional food and beverages, stay in a hotel room, or play other casino games,” said Morris.
Both Senate bills have had a hearing, but no further action has been taken.