MO online gambling bill would allow three skins per casino and a 12% tax rate

Missouri Emerges As A Dark Horse Candidate For Online Gambling Legalization In 2021

Missouri has been eyeing the possibility of legalizing sports betting since the start of the year. Now, online casinos and poker are on the table as well.

The push for sports betting began in the Senate, where there are already three competing bills which would legalize it on slightly different terms. However, it’s in the House that we now see a proposal to add iGaming to the mix.

Dan Houx, the Republican representative for District 54, introduced HB 1364 on Monday. It contains provisions for retail and mobile sports betting as well as the other online verticals, so it would be a replacement for the Senate bills, rather than a separate initiative.

The current situation for gambling in Missouri is idiosyncratic and rooted in the state’s history. Like many states along the Mississippi River, it originally allowed casino games only aboard riverboats. That legacy continues to this day. Although most of its casinos are “boats” in name only, they do have to be situated along either the Mississippi or the Missouri. This places them all in the Kansas City and St. Louis metropolitan areas, so online options would no doubt be welcomed by gamblers in other parts of the state.

It’s the fifth state this year to introduce some sort of iGaming bill. Like North Dakota’s online poker effort, however, Missouri’s bill has to be seen as something of a dark horse in the race for gambling expansion.

What’s in the bill?

The good news for both Missouri gamblers and the industry is that the bill is straightforward. There are no weird restrictions or cash grabs. Overall it follows the New Jersey online casino model, which is a good one that Michigan also emulated quite closely.

Some key features of the bill include:

  • Up to three skins each for the state’s 13 riverboat casinos, which allows for more online brands than are likely to launch in any state
  • A 12% tax rate, which would replace WV and NJ (tied at 15%) as the lowest in the country for online casinos
  • 83.3% of tax revenue to education, remainder to the Veterans Commission Capital Improvement Trust Fund
  • License fees fixed at $50,000 annually for operators, $25,000 for suppliers
  • Interstate gambling possible in future, as permitted by federal law and other jurisdictions
  • Secondary servers required to be located at a MO riverboat casino, but can connect to primary servers anywhere in the US

Poker is barely mentioned in the bill, except to classify both it and sports betting as games of skill. The iGaming portion of the bill allows operators to offer both games of skill and games of chance. Thus, this designation seems to be more forward-looking than meaningful in the immediate term. The bill would legalize online poker on the same terms as casino games, without additional stipulations.

As for sports betting, the bill’s language closely resembles that of SB 256, the most industry-friendly of the three Senate bills. Here too, three skins per certificate holder would be allowed. The tax rate would be just 6.75%, the same as Nevada’s, and license applications would cost $50,000, but the annual renewal fee would be just $20,000.

What’s next for the MO online gambling bill?

Houx’s bill had its first reading on Monday and its second on Tuesday. Online gambling hasn’t been a topic of much discussion in Missouri to date, so at this stage it’s really difficult to say what its chances are.

The next step for the bill is to assign it to a committee, whose first action will be to hold a public hearing.

At the hearing, Houx will present the bill, as its sponsor. Members of the public will then testify either in favor or in opposition to the bill. It’s at this stage that we should get our first real inkling of whether the bill has enough support to pass.

Missouri was once a politically neutral state, considered a bellwether for federal elections. However, it has been drifting rightwards in recent decades. We can therefore expect to see significant moral opposition from social conservatives.

Following public consultation, the committee will hold one or more executive sessions before returning the bill to the floor. When it does so, it will vote on whether to return it with one of the following recommendations:

  • That the bill pass
  • That the bill pass, but with modifications
  • That a substitute bill written by the committee itself should pass in its place
  • That the bill not pass
  • No recommendation at all

After that, the general assembly will vote on the committee’s amendments – if any – and members can recommend their own changes. Following this “perfection” process, there’s a third and final reading, and then a vote. If that vote passes, then the bill goes to the Senate to repeat the process.

Only then, if it makes it through the Senate as well, does the bill go to the Governor to be signed into law.

What are Missouri’s chances of legalizing iGaming in 2021?

As mentioned, it’s very hard to make predictions at this point. The bill has come out of the blue and there’s been little talk about online gambling previously. That in itself may be a reason for pessimism.

It’s possible that there won’t even be enough support in the House for the bill to make it to the Senate. For one thing, it doesn’t have any co-sponsors at the moment, which is a bad sign. However, if it makes it out of committee with a favorable recommendation, the odds are decent that it will go to the Senate.

The Senate is probably where it will face its biggest challenge, precisely because Senators are already debating three sports betting bills, none of which have any provisions for online casino. If there were support there, we would likely have seen it included in one of those bills.

Even if there isn’t as much resistance in the Senate as we might expect, there could be a fight over the terms for sports betting. Proponents of SB 256 will like HB 1364, of course, but those pulling for one of the other two bills may oppose it. We could see a compromise bill emerge, but if Senators have difficulty agreeing on terms for sports betting, including iGaming may prove too complicated.

Politically and geographically, it’s more likely that Missouri will follow in Indiana’s footsteps than New Jersey’s. Indiana has been very successful in implementing sports betting, but did so without iGaming at first. Having established that market successfully, it is now looking at following up with an online casino bill this year. Considering that precedent, one plausible timeline be for Missouri to legalize sports betting this year, launch it next year, and consider iGaming again in 2023.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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