Sports betting stalled in legislature

Sports betting stalled in legislature as MU anticipates Selection Sunday

BY CAMDEN DOHERTY

Missouri news network

JEFFERSON CITY — Video lottery terminals popping up in gas stations, bars and fraternal organizations across the state are part of the reason Missouri residents cannot bet on sports, even as Missouri men’s basketball is expected to be selected for the NCAA Tournament.

Currently, bills legalizing sports betting are out of committee on both sides of the legislature. However, neither chamber has started a debate on any of the bills. A reason why these sports betting bills can’t pass is because they are often paired with video lottery terminal legislation, which contributes to killing the bill every year.

The only discussion on the Senate floor regarding gambling this year has been Sen. Denny Hoskins, R-Warrensburg, filibustering to advocate for the regulation of these video lottery terminals, commonly known as VLTs or gray machines.

The machines have popped up in numerous types of locations around the state, existing in what many call a legal gray area.

Senate VLT efforts fail for now

Hoskins’ SB1 would have legalized and regulated VLTs but was voted down in the Senate Appropriations Committee on Feb. 23. The bill has passed committee several years in a row but never gained any momentum in the Senate. Hoskins has consistently attempted to push VLTs alongside sports betting, making it impossible to pass one without the other.

“A sports book-only bill that does not include VLTs is very detrimental to sports book passing here in the Missouri state Senate,” Hoskins said.

Hoskins’ bill has divided Missouri casinos and small business owners for several years. This has contributed to both sports betting and VLT bills failing to pass the Senate.

SB1 failing in committee is a positive sign for those who want legalized sports betting. The committee taking Hoskins by surprise is a sign that a large portion of the Senate is united in not letting VLT regulation get in the way of sports betting.

However, when Hoskins filibustered on the floor, he had supportive conversations with members on both sides of the aisle. Sen. Karla May, D-St. Louis, filed her own bill to help legalize and regulate VLTs.

“Right now, none of the machines are being taxed, none of the proceeds are being taxed. So my bill is creating a regulatory system to tax those machines and brings them into compliance,” May said.

On the floor, both May and Hoskins stressed how the machines would benefit small businesses and fraternal organizations in their districts, whereas sports betting would benefit the casinos and national sports betting apps.

Hoskins also pointed out that his bill would have taxed the VLT gross receipts at 36%, with 4% going to the local municipality.

“With a 10% tax rate, we’re definitely leaving a lot of money on the table,” Hoskins said.

The sports teams that testified at Senate hearings were relatively agnostic when it came to SB1 and VLT machines. While many spoke in support of the bill, they did so in hopes of helping push sports betting through and would not comment about VLTs when asked about them by committee members.

The groups that did testify against VLTs were casinos and their representative organizations.

Mike Winter represents the Missouri Gaming Association. He and his clients believe that while casinos follow stringent gaming commissions, the framework of the bill would not apply as strictly to VLTs, he said.

“These bills have been around for six or seven years trying to legalize slot machines by calling them video lottery terminals,” Winter said.

Winter’s concerns were echoed by other lobbying groups for casinos, such as the Home Dock Cities and PENN Entertainment.

The dynamic between sports betting lobbyists and video lottery lobbyists has partly led to the Senate infighting on gambling bills.

In the Senate, however, President Pro Tem Caleb Rowden, R-Columbia, has publicly supported Missouri legalizing sports betting.

“It’s time to do this,” Rowden said. “Everyone around us has already done this.”

While both bills seem to have no future in the Senate, VLT legislation is not completely done for the year. Both lawmakers can attempt to add their bill to other sports betting legislation, or they can attempt to push a bill that passes the House.

During his filibuster, Hoskins said he is going to offer 250 amendments about VLTs because the lack of regulation on VLTs will cost the state $250 million in potential revenue. Hoskins offered 150 amendments last year to try to attach VLT regulation to sports betting bills.

Hope for approval in the House

The House held a hearing March 8 on HB699, sponsored by Rep. Bill Hardwick, R-Waynesville. The bill resembles Hoskins’ SB1, and Hardwick acknowledged taking inspiration from the bill in his testimony.

Hardwick is chair of the House Emerging Issues Committee, where the bill is being considered. He said in committee that he believes VLTs should be regulated and he wants the committee to discuss ways of doing that under the state’s constitution.

“I’ll be open-minded with everybody,” Hardwick said.

Small businesses, lottery machine advocate groups and gas station lobbying groups showed up to support the House bill.

April Kabrick owns Boozers Bar & Grill in Liberty. She said she has not added a VLT machine to her bar because she is worried about being prosecuted. She said she wants VLT legislation to pass so she can be on the same playing field as bars taking advantage of legal gray areas.

“VLT gaming is a solution to help relieve some of the expenses that we can’t make up for otherwise,” Kabrick said.

Lobbyists for Midwestern Petroleum, general store lobbyists and Missouri businesses all echoed the sentiment.

“It’d be good for small businesses that need this additional money to operate and help pay all the increases in everybody’s electricity, insurance and employees,” said Tom Parsons, president of Parsons Oil Co.

The same day the Senate committee voted down Hoskins’ bill, they voted Sen. Tony Luetkemeyer’s, R-Parkville, SB30 sports betting bill out of committee. HB 556, sponsored by Rep. Dan Houx, R-Warrensburg, on sports betting made it out of the House committee unanimously the same day. The bills include no mention of VLTs.

Both Luetkemeyer’s and Houx’s bills received strong support from casinos, sports betting websites and sports teams in committee.

“Having sports wagering will give us the opportunity to continue to grow locally. We can use sports wagering to introduce new fans to our team, engage with our existing fans in a new way and continue to continue a behavior that our fans have already adopted,” said Ford Galvin, vice president of data strategy for the Kansas City Current.

The Kansas City Current is in a unique position as they are playing the 2023 season in Kansas, where sports betting is already legal. Then, they will move to their new stadium to Missouri in 2024. They are already reaping the benefits of legal sports betting and are hoping to continue those benefits.

The Kansas City Current is not the only sports team that wants gambling in Missouri. Representatives from the Kansas City Royals, St. Louis Cardinals, Kansas City Chiefs, St. Louis City SC and St. Louis Blues all testified in support of the sports betting bills.

“With our proximity to Kansas, we see a lot of fans driving, from and to Kansas, and we’d (Missouri) like that ability as well,” said Cara Hoover, a lobbyist for the Kansas City Royals.

The House has passed an array of sports betting bills in the past. However, clashes between casinos and video lottery groups have killed both VLT and sports betting bills in the Senate.

The question now is whether the rank and file members of the Senate will vote to support sports better without VLTs or let VLT legislation put sports betting legislation in jeopardy again.