Missouri lawmakers renew sports betting push after losing legalization race to Kansas

Rich Sugg/rsugg@kcstar.com

As Missourians continue to cross into Kansas to place bets on sporting events, Missouri lawmakers plan to renew a push to legalize sports wagering next legislative session.

One bill, which would legalize and tax sports betting as well as controversial gas station lottery machines, has already been pre-filed by state Sen. Denny Hoskins, a Warrensburg Republican. And at least one other lawmaker intends to file another sports betting bill when the Missouri General Assembly returns to Jefferson City in January.

“The message that my colleagues have communicated to me is that we want to get this done, we want to get this off our plate and off the table,” Hoskins said in an interview with The Star Monday. “I think it has a very good chance of passing.”

Missouri’s renewed effort comes after the legislature failed to beat neighboring Kansas in the race to pass similar legislation last session. Some lawmakers and political strategists say Missouri is missing out on millions of dollars of tax revenue, particularly from fans who can now travel to neighboring states like Kansas and Illinois to place bets.

In the first two weeks of sports betting in Kansas, which became legal Sept. 1, over 2.4 million bets were placed, according to data from the Kansas Lottery.

During that first week of Kansas sports betting, roughly 104,000 attempts from people in Missouri trying to access the Kansas markets were blocked, according to GeoComply Solutions Inc., which supports all of the mobile sportsbooks in Kansas.

“I was blown away by just the sheer amount of bets that were placed in Kansas, the amount of bets that were tried to be placed in Missouri,” said state Rep. Kurtis Gregory, a Marshall Republican. “The number one thing I heard from friends and some constituents was ‘what is taking you guys so long to do this? I’m tired of driving to the state of Kansas to place a bet.’”

Both Republicans and Democrats say they’re hopeful that Kansas may spur Missouri lawmakers to finally get wagering across the finish line after negotiations stalled last session.

“The border war between Kansas and Missouri is very real,” said Senate Minority Leader John Rizzo, an Independence Democrat. “I think that we’re feeling more pressure now than we ever have from our constituents about being able to make bets online.”

Dispute over video lottery terminals

But disagreements over whether sports betting legislation should include lottery machines, called video lottery terminals, are likely to continue. The dispute comes as the unregulated gambling slots have popped up across rural Missouri over the last several years — at gas stations, truck stops and fraternal organizations. Attempts to regulate those gaming machines, which some prosecutors consider illegal, have previously complicated the state’s push to legalize sports betting.

In Kansas, despite more than $350 million of wagers in the first two months of legal betting, the state has received just under $271,000 in revenue, according to a report from the Kansas Lottery. If that trend holds, it puts the state on pace to fall millions short of its 2025 predictions.

Hoskins, a longtime supporter of legalizing and taxing video lottery machines, pointed to Kansas’ modest returns as a sign that Missouri should include the machines in its sports wagering legislation. He said the slot machines would allow the state to bring in an additional $250 million in revenue each year.

The bill would place a 10% tax on the gross receipts from sports bets, the same as Kansas. The video lottery terminals would be taxed at 36%. The bill also requires the legislature to give $5 million each year towards combating compulsive gambling.

“I think there could be a path where they kind of address both of those issues together and try and bring some regulation and transparency to the gray market machines and pass sports betting,” said John Hancock, a GOP strategist and a former director of the Missouri GOP.

“I do think there’s an appetite to pass sports gaming in the state. Missouri’s sort of an island in that whole area and I know that our professional teams want it badly.”

But some lawmakers say the video lottery machines need to be stripped from any legislation if Missouri wants to be the next state to approve sports wagering.

“I’ve always been a believer that VLTs and sports gambling are separate,” said state Rep. Dan Houx, a Warrensburg Republican who plans to file a separate sports betting bill on Jan. 4. “We’ve proven that sports betting can pass at least out of the House. I’m not sure that VLTs can pass out of the House or the Senate.”

Houx said his bill would be identical to one he filed during the legislature’s special session this fall and would impose a 10% tax rate on sports bets — expected to bring in more than $16 million to the state each year. Lawmakers would likely increase that tax rate to somewhere between 15% and 17% during the session, he said.

Much of the discussion surrounding legalized sports betting in Kansas and Missouri has sidestepped the issues of problem and compulsive gambling.

Last month, The New York Times published an investigation into the gambling industry. The newspaper, among other findings, found that the sports betting industry had devised ways to persuade people to keep betting even after they lose money. It also reported that tools to make it easier to quit — some run by gambling companies, others by states — did not always work. In Indiana, for example, people who sought the government’s help to prevent them from gambling found that they were still able to place bets.

‘It’s embarrassing’

Rizzo, the Independence Democrat, said lawmakers have been caught up in the minor details of the legislation for years. He said his constituents and fans just want to be able to bet on sports.

“If you bet $100 on the Chiefs to win the Super Bowl, that’s illegal and every person can see how ridiculous that is and we need to make that right,” he said. “It’s embarrassing and we don’t want to be lapped by Kansas.”

The bill that Houx filed during the special session did not include any legislation related to video lottery machines. It received backing from Missouri’s major sports teams, including the Kansas City Chiefs, Kansas City Royals, Kansas City Current, St. Louis Cardinals, St. Louis Blues and St. Louis City SC.

Gregory said there’s a strong desire among lawmakers to get sports betting across the finish line. The Marshall Republican, who spoke with The Star over the phone while pheasant hunting in Lincoln, Kansas, threw in a jab at Kansas ahead of Saturday’s men’s basketball Border War clash.

“Missouri is gonna beat Kansas this weekend,” he said. “I’m out here in West Kansas pheasant hunting right now and there’s a part of me that wants to stop at the Hollywood Casino on the way back and, you know, put a little money where my mouth is.”