Jefferson City, Mo. – A new economic study released today projects that the legalization of sports betting in Missouri would generate significant revenue for the state. The study estimates that legalized sports betting has the potential to generate $105.0 million for Missouri public education over the next five years.
As Missouri voters prepare to vote on Amendment 2 in November, the study sheds light on the impact the 10% tax on sports wagering would have on Missouri classrooms. The measure would allow both retail and online sports betting, and bring the state in line with 38 others that have already legalized sports betting, including 7 of Missouri’s 8 neighboring states.
“The numbers speak for themselves—legalized sports betting will bring in millions of dollars that could be used to improve our schools and invest in Missouri’s future,” said Jack Cardetti, spokesperson for Winning for Missouri Education. “While Missouri continues to lose revenue to neighboring states that have already embraced sports betting, this ballot measure will help us bring those tax dollars back home, benefiting our students and educators.”
According to the study, commissioned by Winning for Missouri Education and prepared by Eilers & Krejcik Gaming, a leading industry research and consulting firm, the Missouri market could reach a total Gross Gaming Revenue (GGR) of $559.8 million by year five. The study also highlights how the initiative’s revenue projections significantly exceed state forecasts, offering a 34% higher return than the state’s conservative estimates.
The study authors pointed out that their analysis differs from the state’s projections in several critical ways. Unlike the state’s use of outdated and COVID-impacted data from Indiana, the new study incorporates more recent data from comparable states like Ohio and Maryland, which have ramped up their markets quickly, giving a more accurate representation of Missouri’s potential. Additionally, the study projects faster growth in Missouri’s market, based on trends seen in other states, while the state’s analysis assumed a more conservative and slower growth trajectory. Finally, the study corrected an error in Missouri’s revenue calculation, where the state applied tax deductions—such as promotional credits and federal taxes—to adjusted gross receipts (AGR) rather than to the total handle. This resulted in the state underestimating potential tax revenue, which the new study corrects by applying the deductions to the appropriate figures.
“Our study shows that Missouri has the potential to create a competitive, fast-growing sports betting market,” said Chris Krafcik, managing director at Eilers & Krejcik Gaming and the report’s lead author. “Our study takes a comprehensive approach, utilizing the latest data from comparable states that have recently implemented sports betting markets. This method allowed us to create a more accurate and nuanced projection of how Missouri’s market could perform under normal conditions and the potential tax revenue it could generate.”
Key Findings from the study:
· Total potential tax revenue of $134.4 million over five years, with $105.0 million potentially allocated to Missouri public schools over that same period.
· Total potential GGR of $335 million in Year 1, growing to $559.8 million by Year 5
The ballot measure would allow for safe and regulated betting overseen by the Missouri Gaming Commission. With strong safeguards in place, the initiative would ensure that a portion of the tax revenue is also used to address problem gambling.
This study was commissioned by the Winning for Missouri Education campaign and conducted by independent experts with extensive experience in analyzing sports betting markets.
For more information on the economic study and Amendment 2, visit https://yeson2mo.com/
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Paid for by Winning for Missouri Education, Mike Pridmore, Treasurer