Missouri Considers Sports Betting Tax Hike for New Market

The Show-Me State is considering a drastic change to its gambling market.

The Missouri House is considering HB 3533, which proposes to increase taxes and fees for all gambling operators in the state. That includes mobile sportsbooks, even though Missouri’s sports betting market launched just over six months ago. A public hearing was held last week to discuss the proposal, with several groups traveling to share their views.

If passed, sportsbooks would see their tax rate jump from 10% to 34%. 

While Missouri’s new sports betting market has been active, it hasn’t generated the tax revenue lawmakers expected. The disappointing start coincides with a downturn in casino gambling in the state, prompting calls for tax hikes across the board.

Predictably, the sports betting industry has not responded well to the proposal. The Missouri Gaming Association, which lobbies for gambling in the state, warned that sportsbooks would pull resources from the market if HB 3533 passes.

"We came into Missouri when we built our facilities looking for a stable gambling market, and I think that's what we've got," MGA spokesperson Mike Winter shared during a hearing over the bill. "But when you have bills like this ... there may be more favorable markets out there than what this bill would allow Missouri to be."

With the public hearing on the bill completed, the House Crime and Public Safety Committee is expected to vote on it soon.

Missouri is proving to be a cautionary tale

While Missouri’s sports betting market isn’t even a year old, its early struggles serve as a cautionary tale for other states considering legalizing sports betting.

Support for sports betting among the public had been strong for years, but legislative deadlock resulted in proposals to legalize the industry failing. That changed when the state’s pro sports teams partnered with major sportsbooks to put sports betting on the ballot, allowing voters to decide. 

With lawmakers cut out of the process, it allows the creation of an operator-friendly market. That included a 10% tax rate, which is one of the lowest in the US. It also allows sportsbooks to offer more favorable terms for bonuses and promotions, helping them keep more of their profits. Unfortunately, that hasn’t left much money for the state.

With several non-betting states coming closer to legalization, expect them to learn from Missouri’s mistakes.