Record spending fuels Missouri campaigns to legalize sports gambling, new casino • Missouri Independent

If Amendment 5 passes, it would authorize the MIssouri Gaming Commission to issue one new casino license at a location on the Osage River between Bagnell Dam and its confluence with the Missouri River.

The original law authorizing casino gambling, passed in 1992, limited it to locations on the Mississippi and Missouri rivers. An initiative backed by casino operators passed in 2008 to cap the number of licenses at 13, equal to the casinos then existing or licensed for construction.

There’s no guarantee that Bally’s would receive the license or that the location owned by RIS will be awarded the license. But with local backing and everything ready for an application once the measure passes, it has a big head start.

The investment won’t just be a casino, Rhode said. It will be a destination facility at a normally seasonal tourism location, bringing people at otherwise slack times.

“Having a multifaceted tourism attraction at the lake, which includes a casino, a spa, hotel, convention center and other benefits, is going to be a year round economic boon to that region,” he said. “We’re talking $400 million in investment and 500 permanent jobs.”

One casino is almost certain to be built near the lake. The Osage Nation launched a project in 2021 to have a property in Miller County taken into trust as ancestral lands where it could operate a casino and convention center.

Despite the direct challenge from Amendment 5, the tribal government has not tried to stop it.

The fiscal note for Amendment 5 estimates that it would add about $14.3 million to the state treasury each year. Each casino’s net winnings are taxed at 21% and there are no deductions for promotions such as free bets.

The Mark Twain casino in Hannibal has the smallest annual revenue and paid $7 million in fiscal 2024. The Ameristar casino in St. Charles had the largest revenue and paid $58 million.

“This is not us making up a number,” Rhode said. “This is the state auditor assigning this number so that number is what it is. We feel confident in sharing that number.”

Forty years ago, Missouri also had two gambling proposals on the November ballot.

One established a state lottery, the other authorized parimutuel wagering on horse races. The lottery was passed by lawmakers to follow a move by 10 other states in the early 1980s to authorize lotteries.

The need for new money in education programs was a major selling point for the lottery, Smith said. The nation was coming out of a major recession that had sapped revenues and there was little appetite for raising taxes.

But the bill creating the lottery didn’t earmark the money. Instead, it went into the general revenue fund, where it was only a small portion of the whole. The general revenue fund pays for public schools, higher education, state prisons, Medicaid and a host of other programs.

“If all of a sudden there was an increase in the amount of revenue that was dumped into the K-12 budget and there was no change in the rest of the budget, that’s one thing,” Smith said. “But that history tells us that’s not how it’s going to work.”

The foundation formula is the name of the main state aid program for local schools. When the lottery sold its first ticket, in fiscal 1986, the foundation formula appropriation was $823 million. The following fiscal year, when the lottery contributed $80 million to general revenue, the general revenue transfer to the school fund increased by $73 million.

Throughout the late 1980s, as national figures showed Missouri near the bottom in per-pupil spending and teacher pay, complaints grew that the lottery had not produced the promised results for education.

That led to a 1992 ballot measure earmarking all lottery revenue for education programs. In the first fiscal year that was in effect, the earmarked funds were used for programs supporting minimum teacher salaries and the Career Ladder stipends.

The following year, in fiscal 1995, the foundation formula received its first appropriation of earmarked lottery funds, $33 million. That was about 25% of all lottery revenue that year. The foundation formula appropriation total was $1.4 billion.  

Today all net revenue from bingo, the lottery and casinos is earmarked for education. In the current year’s budget, the lottery is providing $329 million and casino taxes are tapped for $457 million for the $4 billion foundation formula.

Any revenue from Amendment 2 will be an insignificant addition and have no impact on teacher pay, Foster said.

“If you want sports gambling, say that, but don’t put out television ads that have teachers saying teachers are going to get raises,” she said. “We did the math, and even if it was that top $28.9 million, there’s around 900,000 public school kids in Missouri, so that’s 30 bucks a kid.”

Under existing provisions of the constitution, any new revenue from either gambling measure must be used for education programs. The sports wagering amendment does not define which programs the money will support while the Osage River casino proposal adds the earmarking to literacy programs.

The new revenue from sports wagering will make a difference, Cardetti said.

“Not a penny of benefit is going to Missouri, despite the fact that we know thousands of Missourians are already making bets,” he said. “This is the way that we can bring these revenues back to the state of Missouri and regulate something that Missourians are already doing today.”

The good news from history for the promoters of Amendment 2 and Amendment 5 is that Missourians have rarely met a gambling proposal they didn’t like. 

Since 1980, 10 gambling questions have appeared on the ballot and only two — to allow betting on simulcast horse races and authorize a casino at Rockaway Beach on Lake Taneycomo — have been defeated.

In the August St. Louis University/YouGov poll, 50% of voters surveyed said they supported sports wagering after reading the Amendment 2 ballot language while 30% were opposed. The poll did not ask about Amendment 5.

None of the past gambling campaigns had the kind of well-funded opposition that Amendment 2 has drawn. The ads from both sides are filling broadcast airwaves, streaming services and platforms such as YouTube and Facebook.

“We’re using very similar messages that we do on TV and on radio, but now people’s viewing habits are so different and diverse that you’ve got to go meet people where they are,” Cardetti said.

The anti campaign is having an impact, Foster said. 

“It’s definitely tightened,” she said. “It’s margin of error type close, so we’re really pleased to see that.”

The opposition ads clearly state the target is Amendment 2 but the message of skepticism about gambling revenue going to education is having a spillover effect on Amendment 5.

“I bet that they don’t like us or our messaging,” she said.

The opposition to Amendment 2 is making backers of Amendment 5 work harder, Rhode said.

“We’re definitely seeing a little bit of confusion among the voters,” he said. “But the more that we are out there educating voters, you know, sort of what this amendment does, we find the support coming our way.”

The message that the six major professional sports teams back Amendment 2, and that it will keep revenue at home, is just being rolled out to supplement the education message. 

“It makes absolutely zero sense that we have a public policy in the state of Missouri that actively pushes people to go spend money in other states,” Cardetti said.

The opposition campaign would have a tougher sell if that was the message to promote sports wagering from the beginning, Foster said.

“That would be much stronger,” she said. “But the argument ‘let’s make gambling more accessible” is going to hit a lot more roadblocks than ‘let’s give this free money to kids.’”

There are downsides to sports wagering that have not been part of the debate. Earlier this month, The Guardian reported on threats and abuse targeting college athletes who don’t achieve the individual statistics that are fodder for wagers.

And Smith said he’s not entirely comfortable with the bet-from-anywhere nature of sports wagering.

“I’ve observed a lot of young people who are addicted to their phones,” Smith said. “And you know, this is one more piece of candy for them that they might not be able to resist.”