Missouri’s long-awaited launch of sports activities betting has Present-Me State residents flocking on-line and in-person to regulated bookmakers, however don’t be shocked if what’s on provide begins to draw a good variety of out-of-state gamblers as effectively.
Key Takeaways
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Missouri’s launch of authorized sports activities betting encompasses a lighter tax burden and extra aggressive regulatory atmosphere than some neighboring states, positioning it to draw residents and out-of-state bettors.
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Excessive taxes and added per-bet charges in Illinois, together with restrictive or much less interesting markets in Arkansas, Oklahoma, and probably Kansas, may push gamblers to cross into Missouri.
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Trade leaders say the movement of bettors that after went from Missouri into close by states may reverse.
Monday’s debut of authorized sports activities betting in Missouri is below a regulatory and statutory framework that’s extra favorable to sportsbook operators than another jurisdictions.
By way of taxes, Missouri’s regulated bookmakers are on the hook for 10% of their income. In neighboring Illinois, the Land of Lincoln requires on-line sportsbook operators handy over 20%-40% of their income, along with a brand new per-bet tax of 25 or 50 cents.
These taxes are being handed on to shoppers by Illinois sports activities betting operators, which have employed transaction charges and elevated minimal wagering necessities to attempt to make the mathematics work for them within the state.
So, whereas Missourians have been as soon as compelled to journey to Illinois (or Arkansas, or Iowa, or Kansas) to make authorized sports activities bets, they’ll now keep dwelling. It’s additionally attainable that residents of Illinois may begin crossing over into Missouri to keep away from paying sportsbook transaction charges.
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In keeping with Circa Sports activities CEO Derek Stevens, whose firm now affords on-line sports activities betting in each Illinois and Missouri, the momentum has swung towards the latter market.
“I feel it may be very fascinating … to see how many individuals now go over the border into Missouri,” Stevens advised Covers in an interview Monday. “You are going from a state with a really noncompetitive regulatory atmosphere now in Illinois to a state with a really robust regulatory atmosphere in Missouri. You have had lots of people from Missouri going throughout the state line to go wager in Illinois. I feel the tide has utterly modified.”
No transaction charges, no downside
Illinois may already be getting stung by the brand new per-bet tax and the responses by operators to mitigate the monetary hit.
For instance, the Illinois Gaming Board reported just lately that state sportsbooks took greater than 28.5 million bets on skilled sports activities in September. Nonetheless, in September 2024, those self same sportsbooks dealt with greater than 33 million bets on professional sports activities.
Stevens stated he’s had numerous folks attain out to him already to precise their pleasure at not having to go away Missouri to make a wager. That might be doubly true in the event that they have been forking over just a little further for a wager in Illinois.
“Does not matter the place they dwell, they’re all going to be betting in Missouri now,” Stevens stated. “They are not going to be paying a 50-cent or 25-cent charge on a wager.”
It is attainable, then, that Missouri’s sports activities betting market may put further monetary stress on the Illinois sports activities betting market. It is also attainable that Missouri’s state-regulated sportsbooks entice some enterprise from its different neighboring states, albeit for various causes.
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There’s, as an example, no legalized sports activities betting but in Oklahoma. Due to this fact, some Oklahomans may determine to make their technique to Missouri to position a couple of bets.
Model loyalty
Arkansas, in the meantime, has legalized sports activities betting, however it doesn’t have the identical manufacturers as Missouri boasts, a few of which have nationwide clout. This is because of the vast majority of Arkansas income going to on line casino operators and never the sportsbook operators that the casinos have as companions.
The revenue-sharing guidelines have stored corporations like DraftKings and FanDuel on the sidelines in Arkansas; not so in Missouri, although. So, somebody in Arkansas may conceivably journey north to Missouri to patronize the sportsbooks there.
Then there’s Kansas, a state that has had a aggressive marketplace for on-line sports activities betting since 2022. That market has benefited from a scarcity of authorized sports activities betting in close by Missouri.
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Nonetheless, Kansas lawmakers determined this yr to pause any contract-extension negotiations the native regulator was conducting with licensed sportsbook operators.
Whereas the pause will finish subsequent yr, and the sportsbook contracts run into 2027, some lawmakers are additionally kicking round proposed modifications for the Kansas sports activities betting market, akin to a better tax fee.
Solo FOMO
One other concept that’s been mooted is transferring to a single-provider mannequin with the Kansas Lottery.
The concept is {that a} single operator may yield extra tax income for the state, however it might additionally deprive Kansas bettors of manufacturers they’re at present utilizing. Those self same manufacturers would then be accessible in Missouri, and Kansas bettors might be prepared to make a visit to maintain utilizing them.
“Proper now, Kansas advantages tremendously from Missouri not having authorized sports activities betting,” stated John Pappas, a lobbyist showing on behalf of the iDevelopment and Financial Affiliation, throughout a Kansas legislative committee assembly in September. “We see hundreds of bettors crossing state strains on a weekly foundation into Kansas to position these bets. We might both lose these bettors solely, or, if Kansas raises their (tax) fee, we might lose Kansas bettors going into Missouri the place they’ll discover higher odds, higher pricing, and extra aggressive markets.”
The stress of a aggressive market in Missouri additionally comes as states cope with the problem of nationwide sports activities betting through federally regulated prediction markets.
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These exchanges are providing a comparatively fundamental type of sports activities betting in comparison with what state-regulated bookmakers can boast. Nonetheless, prediction markets are certainly a type of competitors for state-regulated sportsbooks in Missouri and past, which is why a number of courtroom battles are ongoing over the legality of prediction market-offered sports activities occasion contracts.
“I do not suppose it is extensively understood what prediction markets are going to do to tax revenues,” Circa’s Stevens stated Monday. “And I feel because it will get extra extensively understood, individuals are going to say, ‘Whoa, what is going on on?'”
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