The Missouri Gaming Commission (MGC) released its revenue figures for the first month of legal sports betting in the state. The gambling regulator noted the state collected just $521,000 in tax revenue, well short of the target of over $4 million per month.
Operators are also working in the red for the foreseeable future to make up for the costs of campaigning for legalization, licensing fees, and start-up expenses. The 16 licensed operators provided customers with more than $125 million in free bets and other promotional benefits in the opening month.
FanDuel led the way in betting handle, with over $212 million wagered on its platform. That accounted for just under 40% of the total Missouri residents staked in December.
However, the MGC released figures show that the company had deductions of $219 million for the month. Additionally, DraftKings took 36% of the wagers, totaling $195 million, but had deductions of $212 million. Caesars Sportsbook and Fanatics similarly had greater deductions than handle, resulting in four of the top six sportsbooks contributing a total of $0 to the state.
The state only collected a sizable amount of money from bet365. The platform accepted $57.7 million in bets and recorded just under $54 million in deductions. This resulted in the operator paying Missouri just over $383,000.
In total, $538.8 million was wagered online, but operators reported expenses of $560.5 million.
Were Campaign Costs Worth It?
While Missouri showed excitement about the launch of its sports betting market, the financial figures raise questions about whether the costs of launching legal sports betting are worth it.
The pro-legalization campaign cost an estimated $43 million, with most major sportsbooks backing the campaign. An opposition campaign also spent heavily, with Caesars contributing around $15 million as it viewed legalization as a threat to its three casinos in Missouri.
Operators therefore have some distance to go to recoup the costs of the campaigns and the promotions offered to attract new customers in the first month.
Author Danny Funt recently published a book titled “Everybody Loses: The Tumultuous Rise of American Sports Gambling.” He told CasinoBeats in an interview that he chose the title not solely because bettors were losing, “But I think that title came into my head once I realized how many operators are struggling to turn a profit.“
Despite generating billions in revenue, DraftKings continues to operate at a loss. In 2024, it lost over $500 million, largely due to customer acquisition costs and backing campaigns for further legalization.
Lawmakers Regret Sports Betting Framework
On the other hand, lawmakers have been critical of the terms of the legal framework, saying it has created favorable conditions for betting companies.
Rep. Dirk Deaton, chair of the House Budget Committee, called the revenue report “sad” and said it was what he expected from an initiative written by sportsbooks.
In comments to local news network KBIA, he added, “In the General Assembly, we ought to look ourselves in the mirror. It’s probably another example of something which we should have figured out and put a better framework in place.”
Sen. Rusty Black was similarly disappointed by the first month’s figures, commenting, “It doesn’t necessarily match the commercials that got this passed, does it?”
A former teacher, he added that he is not sure when any of the promised education benefits will be realized. The state projected it would collect over $50 million in tax revenue in the first year of legal sports betting.
Mike Leara, executive chair of the gaming commission, admitted the 10% tax rate set could have been higher. He stated, “This could have been much different. The tax rate could have been higher, and the deductions would have likely, absolutely, been less.”
Playing the Long Game
Leara remained hopeful that in the longer term, the state would reap benefits from legalization. He stated, “When we finally get through some of these early start-up costs, we’ll see money. In six months, we’re going to have a better gauge of what to expect on the month-to-month basis, and I think that it will increase these numbers.”
Sportsbooks are similarly betting on future profits. Jack Cardetti, spokesman for the Sports Betting Alliance (SBA), stated, “Like in most states, permanent, dedicated tax revenues for education will grow significantly over time after starting small in the initial months of a new sports betting program, due to investing in marketing efforts to migrate bettors out of illegal and unregulated settings toward state-licensed operators.”
He added, “Missouri’s sports betting law anticipated this transition period and required millions in up-front licensing fees, with nearly $7.5 million in fees already paid to the state.”
Other states are considering following Missouri, with Wisconsin and Mississippi being two possibilities to legalize online sports betting this year. The first month of Missouri’s market might not persuade many lawmakers to vote in favor of those proposals, however
The post Missouri Falls Well Short of Tax Revenue Target in First Month of Legal Sports Betting appeared first on CasinoBeats.
The Missouri Gaming Commission (MGC) released its revenue figures for the first month of legal sports betting in the state. The gambling regulator noted the state collected just $521,000 in tax revenue, well short of the target of over $4 million per month. Operators are also working in the red for the foreseeable future to
The post Missouri Falls Well Short of Tax Revenue Target in First Month of Legal Sports Betting appeared first on CasinoBeats.