After several tumultuous years of bitter defeats, proponents of legal sports betting in Missouri finally emerged victorious on Election Night.

On Tuesday night, voters in the Show Me State approved Amendment 2, a ballot initiative that aimed to legalize sports betting across the state. The initiative, which received the backing of the state’s professional sports franchises, passed by a narrow margin of 0.3%.

With approximately 2.9 million votes cast, the measure passed by less than 7,500 votes, according to unofficial results from the Missouri Secretary of State’s Office.

Missouri becomes the 39th state nationwide to legalize sports betting, joining neighboring Kansas which launched sports wagering in September 2022.

Wagers On A Chiefs Three-Peat

While estimates for annual state tax revenue vary somewhat, legal sports betting could bring the state as much as $28.9 million in yearly revenue, according to a fiscal note that accompanied the proposal.

“Missouri has some of the best sports fans in the world and they showed up big for their favorite teams on Election Day,” said St. Louis Cardinals president Bill DeWitt in a statement.

In Missouri, new amendments can become law 30 days following a general election. The amendment directs the Missouri Gaming Commission to make sports betting available by the start of next month. Based on the timeline, however, the 30-day clock expires on Dec. 5. Since the historic PASPA decision in 2018, a number of states have struggled to fast-track sports betting following legalization.

If Missouri goes live on that date, bettors will have ample to time to wager on a Week 14 tilt between the Kansas City Chiefs and the Los Angeles Chargers. The 8-0 Chiefs are slated to host their AFC West rivals in primetime on Sunday Night Football.

At the start of the regular season, BetMGM set odds of 13-1 for any team to go 17-0 in the regular season. At the midway point of the NFL season, the Chiefs are the only team in the league with an unblemished mark.

BetMGM could be one of nearly two dozen entities to be awarded a digital sports betting license.

Each of the state’s 13 casinos qualify for a license, as well as Missouri’s seven pro sports teams.

Altogether, the state can award up to 22 licenses on the digital side. The state projects initial license fee revenue of $11.75 million, according to the fiscal note.

Market Players

FanDuel and DraftKings, the putative leaders of the U.S. sports betting market, are both expected to submit bids for a license. The two industry heavyweights each contributed $20.1 million to Winning for Missouri Education, a political action committee that supported the passage of Amendment 2. A study produced for Winning for Missouri Education estimates that $21.8 billion will be wagered on Missouri’s legal market over the state’s first five years.

The amendment allows the state to collect a 10% tax on sports wagering revenue. The revenues will be appropriated for education purposes, including public schools and higher education, according to the constitutional amendment.

“Thanks to the efforts of bipartisan leaders and local professional sports teams, we’re very pleased to see that voters in Missouri agreed with the merits of what legalized, regulated, and taxed sports betting can deliver for education in the state. We look forward to our product being available to sports fans in the Show Me State in 2025,” a FanDuel spokesman wrote in a statement.

Griffin Finan, senior vice president and deputy general counsel at DraftKings, echoed the sentiments.

“We are thrilled that sports betting will create a vital new, permanent funding source for Missouri’s education system and ensure a brighter future for its students,” he wrote.

The proposal also enables operators to deduct a portion of sports betting taxes against revenues. The deduction is a boon for sportsbooks, as it allows operators to spend a larger portion of revenues on promotions. In high tax jurisdictions such as New York, operators find it more difficult to reinvest into their product.

In terms of bettor wagering habits, JMP Securities analyst Jordan Bender believes spend per adult will be in line with the U.S. average. As a result, Bender predicts that Missouri online gaming revenue will generate about $580 million annually at maturity.

Funding Issues

The tax rate has received some criticism from Missouri State Sen. Denny Hoskins, a Republican. A portion of tax revenue will be earmarked to a Compulsive Gambling Prevention Fund, which includes research on problem gambling, additional treatment and recovery programs, and services related to compulsive gambling.

But the tax fees are comparatively low and not sufficient enough to combat a rise in problem gambling, Hoskins contends.

Missouri Lt. Governor Mike Kehoe became the governor elect on Tuesday with a decisive victory over Democratic nominee Crystal Quade. In the run-up to the election, both candidates favored the adoption of sports betting to provide the state with additional revenue.

The amendment enables the state’s pro sports team to open retail sportsbooks in the vicinity of their venues. There are also implications in the Chiefs’ bid for a new stadium. Kansas law allows the state to apportion sports betting revenue as an incentive for teams to relocate. However, Chiefs President Mark Donovan downplayed the tie-in, stating in August that he didn’t view the initiative as a tipping point one way or the other.

BetMGM also offered odds of 35-1 this summer for a team to go undefeated and win the Super Bowl. The Chiefs are in pursuit of their third straight Super Bowl, a feat that has never occurred in NFL history.