Video Lottery Terminals at Center of Missouri Sports Betting Hearings

• Two sports betting bills were heard this morning in the Missouri Senate Committee on Appropriations
• Sen. Denny Hoskins (R-21) and Sen. Tony Luetkemeyer (R-34) both discussed their sports betting bills at the committee hearing
• Hoskins bill includes a controversial element to legalize video lottery terminals in state convenience stores, truck stops, and other establishments that can sell liquor

Potential legalization of Missouri sports betting will yet again likely hinge on an agreement for the inclusion of video lottery terminals.

The Missouri Senate Committee on Appropriations  heard testimony on both Sen. Denny Hoskins (R-21) and Sen. Tony Luetkemeyer’s (R-34) sports betting bills during a nearly two hour hearing this morning.

Hoskins’ bill (SB 1) seeks to legalize both retail and online sports betting, but also includes the legalization of video lottery terminals (VLTs) throughout the state, a controversial element that largely held up sports betting discussions in the 2022 legislative session.

Luetkemeyer’s bill (SB 30) will also legalize online and retail sports betting in the state, but does not include a VLT element.

No action was taken at the conclusion of the hearing.

Missouri Sports Franchises Support Sports Betting

Missouri professional sports franchises largely supported Luetkemeyer’s bill and the sports betting facets of Hoskins’ bill, but did not take a position on the legalization of VLTs. St. Louis Cardinals President Bill DeWitt testified at the hearing and urged the assembled lawmakers to come to an agreement on VLTs.

DeWitt told the committee that the MLB franchise hoped sports betting and VLTs would be “bifurcated” and not discussed as a package moving forward in order to improve the chances of sports betting legalization.

DeWitt’s comments were largely supported by other Missouri professional sports representatives at the hearing. All support sports betting, but no team representative would take a stand for or against the inclusion of VLTs.

Steve Chapman, executive vice president of the St. Louis Blues, also supported Luetkemeyer’s bill, as did a representative from the Kansas City Chiefs.

Luetkemeyer’s bill sets the sports betting tax rate at 10% of adjusted gross gaming revenue and does not include an element for VLTs.

Missouri casinos, under SB 30, may conduct retail sports betting with up to three individually branded interactive sports betting platforms. It may conduct online sports betting with up to one interactive sports wagering platform.

VLT Issue Not Going Away

Hoskins’ bill, officially named the “Honoring Veterans and Support Education Act,” seeks to help fund education and capital improvements at Missouri veterans homes and cemeteries.

The bill would allow for VLTs “in fraternal organizations, veterans’ organizations, and truck stops, as such terms are defined in the act, and in business entities licensed to sell liquor by the drink.” VLTs would be taxed at 36% and lottery facilities would be capped at five machines, with other entities at eight machines. Hoskins believes the legalization of VLTs will help rid the state of rampant “gray machines,” which are thousands of unregulated and illegal gaming machines being operated across Missouri.

His bill calls for a 10% sports betting tax rate on adjusted gross gaming revenues. The first online sports betting license would cost an operator $250,000, with a second license increasing to $500,000.

Many convenience store owners, truck stop owners, and small business owners testified in favor of SB 1 and the revenue stream it would bring to their business.

Ron Leon, Executive Director of Missouri Petroleum Marketers and Convenience Store Association, said SB 1 will allow the maximum number of legal VLTs at the maximum number of convenience stores and gas stations across the state. Other VLT legislation cuts out the small mom and pop convenience stores that would benefit the most from the machines.

“It would be patently unfair to pass a bill allowing VLTs, but to cut out those convenience stores,” he said.

Hoskins has alluded that he will block any sports betting legislation that does not include VLTs. In the 2022 session, Hoskins filibustered a Senate hearing for nearly three hours until the meeting was concluded after an amendment was floated to strip VLTs away from a sports betting bill.

Can VLT Revenue Legally Fund Veterans Homes?

Hoskins’ bill, officially named the “Honoring Veterans and Support Education Act,” seeks to fund education and capital improvements at Missouri veterans homes and cemeteries. However, as VLTs would be a part of the state lottery, a Jefferson City gaming lawyer believes revenue from these machines would not legally be able to fund what Hoskins has planned.

Gaming attorney Marc Ellinger, who was brought in by PENN Entertainment to testify on their behalf, said it is unconstitutional for any lottery revenue to fund anything other than education in Missouri.

According to the Missouri constitution, any revenue stemming from the state lottery is legally required to fund education, Ellinger said.

Anything else would be an unconstitutional use of lottery funds.