Missouri today is among the few states that haven’t legalized sports betting. Surrounded on all sides by states that regulate and tax such betting, Missouri is essentially leaving money on the table. Legislation this session to change that deserves careful consideration — but only if it’s paired with reforms to tax the rogue video gambling machines that have proliferated all over the state without regulation or taxation in the absence of coherent statutes governing them.
There are certainly societal downsides to gambling, but the debate over whether it should be legal is effectively over. For better or worse, America has decided that gambling, like alcohol, marijuana and other once-banned vices, should be available to adults who want it. Missouri, like most states, already regulates and taxes legal gambling in the form of the state lottery and the casino industry. The best way to mitigate those societal downsides is to ensure the games are in fact well-regulated and that the tax rate is high enough that the benefit to the taxpayers outweighs the social costs (enough to fund gambling-addiction treatment programs in addition to substantial new money to education, for example).
But these are exactly the things that aren’t happening in relation to the thousands of unregulated video gambling terminals in bars and gas stations around the state. Until that open flouting of state gaming laws is reined in, it will continue to drain away tax revenue the state gets from the legitimate gambling industry. Any new, legalized sports-betting market would be setting up shop under a similar disadvantage.
We have previously examined and dismissed the strained arguments of video gambling purveyors, who claim their products are mere entertainment rather than gambling. That’s nonsense. Their only real argument is Jefferson City clout. As a result, the Missouri Legislature has been paralyzed on the issue, leaving local prosecutors hesitant to confront these plainly illegal games without more specific guidance from the state.
New legislation in the just-opened 2023 legislative session seeks to remedy that by either banning or regulating and taxing the video games. At least one bill would legalize and tax it in conjunction with creating a legal sports-gambling industry — a reasonable pairing, since expanding the legal gambling industry in any way makes little practical sense as long as these untaxed video gambling scofflaws are still siphoning money away from that industry.
Whether the video gambling and sports betting should be in the same bill or in separate ones moving concurrently is a question for the legislative sausage-makers. But the Legislature should absolutely not make any change to state gaming laws that doesn’t address the video issue once and for all. Legalizing sports gambling in Missouri is an idea whose time has come — but legislators will be betting against its success if they do it without calling the bluff of illegal video gambling.
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