Missouri legislators heard from Major League Baseball, the NBA and the PGA on Thursday about their leagues’ role if legalized sports betting comes to the state.
The General Assembly is expected to consider legalizing sports betting in the 2020 legislative session.
Among the details that need to be worked out is whether lawmakers will consider a sports gambling proposal that includes college sports as well as professional sports, mobile phone betting and in-game wagering on a particular play during an event.
They also have to decide about tax rates and license fees. Tax rates on sports betting vary widely across states that already have legalized the practice. The rate is 37.5% in Pennsylvania, but as low as single digits in Indiana, Iowa and Nevada, according to information provided to lawmakers by the gambling industry.
The Missouri House formed a Special Interim Committee on Gambling to explore these issues. The panel has met a handful of times this fall to take public testimony on sports betting and other new forms of gambling cropping up in Missouri. It’s expected to issue a report on gambling — including a section on sports betting — by Dec. 1. Several members of the committee, which met in Jefferson City on Thursday, are expected to file sports betting legislation when the General Assembly returns in January.
Representatives from the gambling industry seem especially intent on Missouri approving mobile wagering if the state goes ahead with legal sports betting. They said legal mobile sports betting is the only way to stamp out the black market for such activity. A dent can’t be made in the illegal sports betting market unless people are able to make wagers from their phones, they said.
If Missouri legalizes sports betting, professional sports leagues will be looking for a payout.
Major League Baseball, the National Basketball Association and the Professional Golfers Association would want Missouri to require sports books to use data provided exclusively by the leagues, said Jeremy Kudon, an attorney and lobbyist for those organizations. He said the use of other data would make sports books too unreliable. Illinois and Tennessee have already passed similar mandates that require league data be used.
Kudon also wants professional sports leagues to be able to ban sports betting on certain events — such as baseball games during spring training and the home run derby. The leagues are also asking for a 0.25% cut of the handle, though lawmakers seemed unlikely to go along with that request.
Casinos and other gambling entities hoping to run sports betting outfits have largely opposed many of the recommendations made by sports leagues seeking new revenue streams. But Kudon said leagues deserve a share of legal sports betting.
“You can’t have sports betting without our sports, but you certainly can have sports betting without a casino,” he said during the hearing.
Representatives from the National Football League and National Hockey League players associations also testified before Missouri lawmakers. They said the lawmakers would have to look at new criminal and privacy laws to protect players if sports betting was legalized.
Specifically, they are concerned that players might be pressured to throw games — or encounter more angry fans who had lost a lot of money on a play — that would put athletes in difficult positions with no legal recourse.
NFL Players Association Counselor Joe Briggs also said Missouri should implement protections for players that hide their private, physical data from the public. Health statistics — such as heart rate — of professional athletes are often tracked closely, and widespread sports betting could create a market for that type of information, Briggs said.
Athletes also have the most to lose if someone goes awry with sports betting, Briggs said. He points to the Major League Baseball scandal during the 1919 World Series, when players on the White Sox were found to intentionally lose. The incident is often called the “Black Sox” scandal.
“Those men that were a part of the Black Sox scandal never outlived the scandal around them, even the ones that never participated or it was actually proven that they never took any money or participated in any gambling operation. But their names were forever besmirched because they were on the teams with those folks,” he said.
Sports betting is one of the rare new sources of state government revenue that Missouri’s Republican-controlled statehouse might be willing to entertain, but experts caution not to expect a windfall of new revenue.
Most states that have legalized sports betting were falling short of projected revenue last spring, according to an Associated Press analysis.
“People will be disappointed about the stream of revenue,” said state Rep. Wes Rogers, D-Kansas City, on Thursday.