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Betting set to be overshadowed by gaming machine debate at MO House hearing


The Missouri House of Representatives is due to hold a hearing on the potential impact of regulated fantasy sports and real-money wagering later today (24 October).

However, discussions on regulation are likely to be overshadowed by an ongoing debate around the legality of video lottery terminals in the state.

The machines in question are located in gas stations, convenience stores, bars and restaurants throughout the state. 

The debate over the machines has been ongoing throughout 2019, with executives from supplier Torch Electronics, the legality of whose machines is being questioned, originally expected to give testimony at a hearing earlier this month. 

However, the execs failed to attend the October 10 hearing, at which state officials argued that the machines are in fact illegal under state law. 

A lawsuit due to be heard in December and filed by Eric Zahnd, prosecuting attorney for Platte County, accuses Kansas-based Integrity Gaming of operating illegal gambling, having installed machines at convenience stores in the state.

While there machines are not regulated under state law, lawmakers have made attempts to develop a legal framework in which they would be permitted to operate. 

Most recently Senator Denny Hoskins filed SB43, also known as the Video Lottery Control Act, which aimed to establish a $50,000 license fee for terminal manufacturers, distributors and operators. Retail establishments that hosted the machines would be expected to pay a $500 fee.

Operators would have been required to pay a 36% tax on gross revenue to the state Lottery Commission. However, the bill failed to make it beyond the Senate Progress and Development Committee in the most recent legislative session. 

Segev LLP’s Mark Balestra, a regular contributor to iGB North America and one of the speakers at the hearing, noted that the forum was likely to be “consumed” by the issue. He said at least 84 complaints filed related to the gaming machines had been filed by members of the public in recent weeks. 

Despite this, he added: “The hearing could nevertheless provide insight into the committee’s appetite (or lack thereof) for taking on sports betting. 

“The House saw the introduction of at least three sports betting bills last year,” Balestra pointed out. “The chamber’s most recent action on sports betting came in April with the passage of HB 119 by the Standing Committee on General Laws.”

HB119, filed by Representative Cody Smith, aimed to legalize wagering in land-based venues, as well as on-premises interactive betting. Operators would have been charged a $10,000 fee for each license.

It would have imposed a royalty fee on operators, with 0.75% of handle to be allocated to the US professional sports leagues. Missouri’s public universities that sponsor National Collegiate Athletics Association (NCAA) football and basketball teams would have also been eligible for 0.25% of amounts wagered on collegiate competitions.

After passing the General Laws Committee, Smith’s bill failed to make it through the Legislative Oversight Committee.