Sports Betting Becomes Legal in Missouri After Amendment 2 Passes

Sports betting is about to become a reality in the Show-Me State. 

Missouri voters passed Amendment 2 during Tuesday’s election by a margin of 0.2%. The result will be the state launching a legal sports betting market with a 10% tax on operators. All tax revenue generated from the industry will be used to support the state’s education system and problem gambling funds.

The Missouri Gaming Commission will regulate and help launch the new industry.

Victory Ends Years of Legislative Deadlock

he passing of Amendment 2 ends a years-long battle in the Missouri legislature. While support for sports betting has been strong, opponents successfully filibustered or killed all previous proposals, leading to proponents taking matters into their own hands.

The legislative roadblock led the state’s pro sports teams to organize the Winning for Missouri Education coalition. The group began a ballot initiative, gathering enough signatures to get the amendment put on the ballot. Those efforts were rewarded on Tuesday.

$100 Million in Tax Revenue Projected

According to a report from Eilers & Krejcik, Missouri is projected to see around $100 million in tax revenue over the first five years of legal sports betting. The firm was hired by Winning for Missouri Education, and their projections were used to sway voters ahead of the election.

The report also projects the industry will generate $560 in revenue over that same span. With the state featuring many pro and college teams across sports, excitement for sports betting is expected to be high. 

Concerns Over Taxation Remains

While the projections from Eilers & Krejcik show promising numbers, opponents point to a tax loophole as a significant concern. The issue is that operators in the state will be able to make federal tax deductions on revenue. If sportsbooks can write enough off, they will not have to pay any state tax. This was not a factor included in the $100 million projection. 

That means Missouri has the potential to make little to nothing from its new industry. Aside from the dangers of legalizing the industry, this would also be devastating for the state’s education system. Amendment 2 uses sports betting tax revenue to replace the education system's current funds. 

If Missouri doesn’t find a way to close this loophole, schools nationwide could be without funding. This was the cornerstone argument of opponents of the Amendment, including Caesars Entertainment.