Missouri House Special Committee Evaluates HB 2331 for Legalized Sports Wagering

By Matt Speakman,
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Last updated: January 29, 2024

Legislators are about to consider the merits of HB 2331, a proposed law that would legalize sports betting, which is a big step forward for Missouri’s gambling industry. This bill, which is being sponsored by Representative Dan Houx, has the ability to change the gaming environment in the state by allowing sports betting in an area where it has not been allowed before.

The Missouri House Special Committee on Public Policy is scheduled to meet on Tuesday to discuss the details of HB 2331. The primary goal of this legislative effort is to authorize sports wagering at the 13 riverboat casinos located throughout the state. The bill also creates opportunities for mobile sportsbook companies to serve Missouri internet consumers.

The publication of a fiscal analysis, which provides an overview of the possible economic effects of regulated sports betting in Missouri, is essential to the legislative process. The analysis suggests that allowing sports betting might result in a significant increase in revenue. The projected revenue for funding education is expected to be around $7 million in the first year, and by 2029, it might potentially rise to $35 million.

Tax Structure and License Applicants: Core Components of HB 2331

With HB 2331, sportsbooks would be subject to a 10% tax on their adjusted gross receipts, introducing a complex tax structure. The purpose of this system is to finance different projects, and operators are permitted to exclude promotional bets from the total. Interestingly, over the course of four years, the tax benefit for promotional bets will gradually taper out.

The law expects there to be competition among the 24 applicants for licenses to offer sports wagering. This comprises three licensees connected to professional sports districts, eight mobile sportsbook operators, and thirteen riverboat casinos. The state is committed to encouraging responsible gambling practices, as seen by the requirement that applicants submit a responsible gambling plan and pay a large upfront application cost of $100,000.

Beyond financial concerns, HB 2331 incorporates measures meant to address issues with compulsive gambling. The legislation requires the Department of Mental Health and the Missouri Gaming Commission to work together to create a thorough study that addresses the “neuroscience, psychology, sociology, epidemiology, and etiology of compulsive gambling.” Although the expected cost of this study project is $500,000, there are concerns regarding the financing source, specifically whether the Compulsive Gamblers Fund or the Gaming Commission’s regular budget will be used.

In addition, the bill mandates a $500,000 yearly contribution to the state’s Compulsive Gamblers Fund—a substantial increase over previous fiscal years. The fund’s managing agency, the Department of Mental Health, has asked for about $153,000 for Fiscal 2025. The parliamentary study states that the fund had a balance of $102,884 as of December 31.

Legislative Challenges and Stakeholder Perspectives: Navigating Complex Terrain

Although HB 2331 has historically received support in the Missouri House when it comes to sports betting legislation, its future depends on what happens in the state Capitol. The fact that similar proposals have encountered obstacles in the past makes the success of the proposed legislation doubtful.

Nevertheless, the state Senate has started working on related projects; Sen. Tony Luetkemeyer filed SB852. This substitute measure is similar to HB 2331 but proposes a 12% tax rate increase on sportsbooks. At the same time, Missouri’s professional sports teams—including the St. Louis Cardinals—are pushing for a ballot initiative. With the passage of this legislation, voters would have the ultimate say over the state’s sports betting policies.

Stakeholders, lawmakers, and the general public are waiting to see how the legislative process plays out as Missouri stands at the cusp of possibly legalizing sports betting. These discussions continue to center on the effects on the casino industry, state revenue, and responsible gambling programs, indicating a critical turning point in Missouri’s attitude toward sports betting.