Angry there's no legal sports betting in Missouri? Blame illegal video gaming.
It appears the Missouri Legislature will adjourn next month without approving a sports-betting package that would significantly enhance state gambling tax revenue, as most other states do. Its failure comes not because the idea lacks support in Jefferson City but because a related component of the proposal is to finally settle the issue of the unlicensed, untaxed video gaming machines that operate with impunity all over the state — and that well-heeled industry apparently has enough lawmakers in its pocket to prevent such regulation from happening. Thus, Missouri’s taxpayers are now being doubly ripped off by illegal gambling operations and the legislators who protect them.
With electronic sports betting legalized in seven of the eight states that touch Missouri (in the eighth, Kentucky, legislation is pending), the leaders of the Show Me state are showing their constituents how to lose tax revenue. During February’s Super Bowl alone, more than a quarter-million Missouri-based internet accounts were blocked in attempts to place bets, The Kansas City Star reported. Many other Missourians undoubtedly crossed state lines to place bets in states where it’s legal, or turned to illegal offshore betting sites. Thousands of Missourians, across sports and seasons, are placing bets from which other states or foreign entities profit in taxes and fees.
At the same time, the thousands of electronic video games that offer potential payouts to customers at gas stations and other venues across Missouri are also not bringing in a dime for Missouri taxpayers because their politically connected operators have, for years, ensured a political deadlock in the Legislature. The industry claims the machines aren’t actually gambling devices, but it’s a specious argument. Patrons put money in with hopes of getting more money out, and sometimes they do; whatever the industry chooses to call that, the dictionary calls it gambling. And it’s not being regulated or taxed by anyone.
There are two acceptable ways to address this: Legalize, regulate and tax the machines, as casinos are regulated and taxed, or specify that they are illegal and prohibit them. We are on record supporting legalization, since this particular genie is out of the bottle and could be a profitable one for the taxpayers. But shutting them down as the illegal gambling operations that they are would also be preferable to the status quo. Instead, the status quo persists: legislative paralysis, allowing unlicensed video gaming to continue raking in Missourians’ money without passing any of it along to the taxpayers in the form of gaming taxes.
It’s understandable that sports-betting supporters want to separate the two issues legislatively, but their linkage makes sense. This is about Missouri’s gambling industry as a whole. If widespread frustration over the failure of legalized sports betting this year ultimately breaks the Svengali-like hold that the illegal video gaming crowd has over Missouri’s lawmakers, it will have been a wise bet.
