Missouri bill proposes royalty fees for sports leagues

11 December 2018

The latest sports betting bill to be filed in Missouri proposes paying royalty fees to the US professional sports leagues and National Collegiate Athletics Association (NCAA).

House Bill 119, pre-filed for discussion in the 2019 legislative session by Republican Representative Cody Smith, proposes allocating a percentage of all amounts wagered on sports to sports governing bodies.

Smith’s bill amends the Revised Statutes of Missouri to permit sports betting in land-based venues, as well as on-premises interactive wagering. Operators will be charged a $10,000 fee for the interactive licence, and the same sum for a bricks-and-mortar certificate. It would also restrict sports betting to those aged 21 and over.

The so-called royalty fee is to be split between the professional sports leagues and NCAA. Licensed operators will be required to pay 0.75% of total sports betting handle for events organised by the leagues to the Missouri Gaming Commission, which will be responsible for distributing the money.

A further 0.25% of handle generated from wagers on NCAA football and Division 1 basketball competitions will go to the association, again via the state Gaming Commission. This will be distributed to Missouri public universities that sponsor NCAA football and Division 1 basketball teams.

The bill also sets out a provision for the leagues to order Missouri licensees to only use official league data for wagering on “commercially reasonable terms”.

Operators will then be required to pay an additional tax based on 6.25% of gross gaming revenue,  which will be paid into the Gaming Proceeds for Education Fund, a new vehicle for supporting educational programmes in Missouri.

Licensees must also pay an annual administrative fee of $5,000 to the Gaming Commission. A further $10,000 payment will be due at the end of the five-year licence period, to cover costs associated with the renewal process.

Both of these fees will be paid into the Missouri State Wagering Fund, which is to be created through the legislation. Any money not required for the administration of the state’s sports betting market or licence renewals will then be invested by the Fund, with any remaining at the end of each calendar year to be transferred to the General Revenue Fund.

It is the second sports betting bill to be pre-filed ahead of the 2019 legislative session, after Senator Denny Hoskins’ SB44. This only permits in-person sports betting on riverboat gambling vessels, though would permit online and mobile wagering throughout Missouri.

It sets out a higher tax rate of 12% of gross revenue, with an additional administrative fee, based on 2% of gross revenue, to be paid to the state Gaming Commission. Licensees will also be required to pay a fee based on 0.5% of sports betting handle to the newly-created Entertainment Facilities Infrastructure Fund.

This will be used to fund the upkeep of convention centres, entertainment and sports venues, exhibition and trade facilities and cultural establishments, as well as playing fields and parking facilities.

Both bills will be examined by the Missouri legislature once the legislative session begins on January 9, 2019.