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A bill backed by professional sports teams and most casinos in Missouri is headed for the floor of the state’s House of Representatives, but with changes that include new restrictions on promotional deductions.
The House Special Committee on Public Policy this week approved House Bill 2502, but made several changes in the process, including limiting deductions on promotional play and increasing problem gambling funding.
The bill includes three online skins for each of the state’s 13 casinos, although operators who own multiple properties would be capped at six skins in total.
Each of the state’s six professional sports teams would also receive an online skin, although they would not be permitted to operate an on-premises sportsbook at stadiums.
All operators would pay a 10 percent tax on adjusted gross revenues, which, under the original plan, would have permitted unlimited deductions for promotional play.
However, the committee amended the bill to allow for unlimited deductions in the first year of wagering but reduced the number of deductible funds by 25 percent each year until the deductions become phased out by year five.
“If there's going to be some value to the state, we have to look at the reality of how much we're going to allow that promotion piece to be,” said Republican Representative Scott Cupps, who chairs the committee.
The modification also prevents any promotional deductions for the direct cost of advertising, including television, print, and radio ads, as well as billboards.
“That's something that in other states has been allowed, and if you've driven through one of those states recently, you know that,” Cupps added. “Seemingly they do a pretty good job of buying every billboard along the interstate before they report their earnings.”
“If their option is to buy more advertising or report revenue that would go to the state, they err on the side of buying more advertising, and then the value to the state is drastically decreased,” he continued. “And so that was something that we felt it was kind of necessary to spell out in this particular bill."
The committee also doubled the amount of funding allocated to problem gambling programs from $250,000 annually in the original bill to $500,000.
“The reasoning behind this is I think the $250,000 is low,” said Representative Ben Baker, a Republican who introduced the amendment to the bill.
“I think that problem gambling will inevitably rise to some level if this is implemented, and I just wanted to make sure that we kind of beefed-up that amount,” he said.
