A last-ditch effort to legalize sports wagering passed the Missouri House on Tuesday but immediately ran against opposition from the senator whose bill was modified to include it.

While the House has had no trouble passing sports wagering, identified as a priority by leaders of both parties as the legislative session began, the Senate has been unable to get past a fight between backers of a standalone bill and those who want to also legalize video lottery games in bars and truck stops.

The bill the House amended Tuesday arrived as a plan sponsored by Sen. Denny Hoskins to promote investments in rural areas by providing state tax credits for companies making investments in small rural businesses. The House added a version of another bill Hoskins’ has sponsored, the regulatory sandbox act, that exempts innovative new businesses from some state regulation.

Finally, the title of the bill was changed to cover any issue involving taxation and tax credits for child care, internships, donations to hospitals, live entertainment productions and other activities were added in addition to the sports wagering provision.

Sports wagering fit on a tax bill because it includes a 15% tax on net casino revenue from bettors, Rep. Dan Houx, R-Warrensburg, argued during Tuesday’s debate.

Hoskins wasn’t so sure. 

“They may have loved it to death,” he  said.

Hoskins said he had several concerns with the House additions to the bill and said it would have to go to conference before it could come back for another Senate vote. The tax credits and regulatory exemptions are in another bill, already passed through the House and Senate, awaiting final action in the House, he noted.

In previous years, the rural tax credit has run into opposition from those who worry it will lack transparency and be too favorable to developers, allowing businesses like cryptocurrency mining that produce few new jobs. A similar program in Georgia cost that state $50 million and a Missouri developer, Jeff Smith of Columbia, was a major beneficiary, the St. Louis Post-Dispatch reported last year. 

Missouri Senate once again unable to reach a deal on sports wagering legislation

If no sports wagering bill is passed this year, it would be the fifth year lawmakers have failed to act since the Supreme Court in 2018 struck down federal laws banning sports betting nationally. Sports wagering has since been legalized in every state adjoining Missouri except Oklahoma. 

Casino companies and professional sports teams are eager for the revenue from sports wagering and last year agreed on a proposal that slices up the market to their liking. It set the tax rate at 10%, allowed a deduction from gross revenue for promotional costs and allowed players to bet from any location on a smart device.

When the Senate debated sports wagering in early April, members voted to set the tax rate at 15%, limit deductions for promotional costs and increase – to  the fee gambling companies pay for every patron that physically visits one of the state’s 13 casinos.

The fee is currently $2 and has not been changed since casino gambling began in Missouri in 1992.

But that bill – any other bill authorizing sports wagering – faces a difficulty in the Senate because Hoskins insists on also legalizing a new form of lottery game for people to play in bars, truck stops and fraternal halls. The revenue is far greater, potentially, than the taxes from sports wagering and therefore the two should be done together.

Hanging over the legislature’s deliberations is the potential for an initiative campaign. St. Louis Cardinals President Bill DeWitt III told Missourinet that the Cardinals and Kansas City Royals will consider an initiative if the bill fails again.

“The definition of insanity is doing the same thing over and over again and getting the same result,” St. Louis Cardinals President Bill DeWitt III told Missourinet. “Which seems to be what’s been happening in Jeff City on this issue.”

Hoskins also said he’s unsure if the House version of his bill is constitutional.

That issue was raised as the bill was debated in the House on Tuesday. In a series of rulings beginning with one called Hammerschmidt v. Boone County in 1994, the Missouri Supreme Court has defined what lawmakers can and can’t do to legislation as they add amendments. 

State Rep. Peter Merideth, D-St. Louis, said he thinks the bill debated Tuesday would be thrown out if challenged in court, despite sponsors’ insistence that everything fits under the umbrella of taxation.
“I don’t think the Supreme Court will agree with your interpretation of what is allowed on the bill,” Merideth said.