Will Missouri’s Sports Betting Growth End Tax Hike Efforts?

The Show-Me State’s sports betting market just had one of its best months yet.

The Missouri Gaming Commission released its revenue report for May, showing a record-high 8.29% hold and generating $2.13 million in tax revenue. The rise in handle and gross gaming revenue indicates that operators have scaled back the promotional bets offered to celebrate the new market’s launch.

The recent success comes on the heels of panic over the market’s early performance, which has already led lawmakers to discuss a tax hike. That leaves us wondering whether May’s strong numbers will be enough to halt those efforts.

Missouri Market Begins to Deliver

With Missouri sportsbooks ending their initial launch promos, we are finally getting a clear picture of what the market will look like. 

May was the third consecutive month where the state saw over $2 million in tax revenue. While the handle was the lowest the state has seen since launching the market, the lack of promo bets kept gross gaming revenue, tax revenue, and the hold strong.

While the summer is typically slow for online sportsbooks, we expect June to deliver the biggest numbers yet. The state hosted 2026 World Cup matches, welcoming visitors from all over the world. That should result in a massive spike in state tax revenue, keeping the market going strong until the football season begins.

Lawmakers Shelved Tax Hike in May

Earlier this year, HB 3533 was introduced into the House, proposing several changes to the state’s sports betting market. One of those changes was a massive tax hike for online sportsbooks, raising the rate from 10% to 34%. However, the proposal was stripped by the Missouri Crime and Public Safety Committee, which couldn’t get the votes to pass the bill with it included.

The tax rate has been a major concern for many lawmakers, but voters approved the 10% proposal during the November 2024 election. 

Since online sports betting was legalized through a ballot initiative, some lawmakers questioned if they even have the authority to raise the approved tax rate.

Legislative Roadblock Led to Lower Rate

For years, Missouri sports betting bills failed in the state legislature. While many had the support to pass, a small but powerful opposition ensured each proposal failed unless other conditions were met. That includes the legalization of Video Lottery Terminals, which many sports betting proponents didn’t support.

This legislative roadblock led sportsbook operators and local pro sports teams in the state to begin a ballot initiative. This allowed them to propose a legal framework for online sports betting directly to the voters, cutting lawmakers out of the process. 

Since the effort succeeded, the state was stuck with one of the most industry-friendly markets in the US.