Located in the Midwestern part of the United States, Missouri is a relatively late arrival on the North American gambling scene. Most forms of gambling went unregulated until the beginning of the twentieth century when the local legislature outlawed all bookmaking operations. Legal gambling returned to the Show-Me State in the mid-1980s with the legalization of horse racing and the launch of state-operated lotteries.
Less than a decade later, Missourians welcomed the first riverboat casinos housed on licensed excursion boats floating on the Mississippi and Missouri rivers. Recent legislative changes paved the way for the arrival of non-floating gaming facilities in the state. Licensed riverboat casinos were allowed to move their operations on land as long as certain regulatory conditions were met.
Missouri is presently home to thirteen commercial gaming facilities, overseen by the Missouri Gaming Commission (MGC). Over 19,000 Missourians have found employment in the local gambling industry, which contributes more than $997 million in tax revenue. The number of licensed casinos remains capped at thirteen for the time being.
Missouri lacks Indian gaming operations at the moment, although the tribal nation of Osage is currently pushing for a multi-million casino resort near Lake Ozark. Real-money online casinos are prohibited in the state, with social gaming being the only legal option available to Missourians. Things are looking up on the sports betting front as one bill is making progress in the Missouri General Assembly.
Gambling Laws in Missouri
Despite the absence of legal online gaming operations, Missouri is home to a healthy commercial gambling industry that generated over $1.90 billion of gross revenue in 2021. All commercial casinos in the state operate under licenses issued by the local regulatory commission (MGC). The provision of gambling services without a license is a criminal offense under the Revised Statutes of Missouri (RSMo).
RSMo, Chapter 572
Missouri Riverboat Gambling Proposition (Proposition A)
RSMo, Chapter 313
RSMo, Chapter 572
Chapter 572 of Missouri’s Revised Statutes outlines all activities that constitute illegal gambling, along with their accompanying penalties. As is often the case with legal texts, the wording is somewhat abstruse and difficult to digest. According to the chapter, an individual engages in gambling whenever they stake something valuable on an outcome based on chance upon agreement they would gain another thing of value if their prediction is correct.
All games whose results depend partially or entirely on chance constitute contests of chance under said chapter of RSMo. Respectively, it is illegal to provide them without prior authorization. The chapter excludes pari-mutuel betting on horse races, bingo, riverboat casinos, state lotteries, and other licensed activities from the definition of gambling.
Antique slot machines, i.e. those manufactured over thirty years ago, are also excluded provided that their owners do not use them for illegal gambling purposes. Players who have derived 20% or more of their annual income from gambling over the last five years are considered professional gamblers.
Players engaging in unauthorized gambling recreationally are committing class C misdemeanors. Professionals who participate in illegal forms of gambling are guilty of class A misdemeanors, while those who willingly engage in gambling with minors risk penalties for Class B misdemeanors.
The penalties vary based on how severe the violation is. Illegal recreational gambling is the least grave offense and as such, carries maximum penalties of 15 days imprisonment and fines of up to $750. For context, the offense of illegal recreational gambling carries the same weight as littering, animal neglect, and driving in the wrong lane on a highway.
Class B is the second most severe type of misdemeanor in Missouri. Apart from engaging in gambling with minors, the category comprises crimes like trespassing, reckless burning, and misusing 911. Individuals convicted of class B misdemeanors can end up spending half a year in a county jail and paying up to $1,000 in fines.
As the gravest category of offenses, class A misdemeanors carry the harshest penalties of maximum imprisonment for a year and fines of up to $2,000. Apart from professional gambling, the category covers grave crimes like counterfeiting, stealing, kidnapping, arson, and elder abuse.
Missouri Riverboat Gambling Proposition (Proposition A)
Missouri residents approved commercial gambling on licensed riverboats during a 1992 referendum. More than 62% of the residents voted in favor of Proposition A, aka the Missouri Riverboat Gambling Proposition, which authorized gaming on vessels that floated on the Missouri and Mississippi Rivers.
The initial plan was for the State Tourism Commission to regulate the boats for the purpose of attracting additional revenue. The proposal included a $500 cap on the maximum amount each patron could lose during a single excursion. The General Assembly subsequently passed legislation to regulate riverboat gambling in April the following year
RSMo, Chapter 313
The General Assembly adopted several legislative amendments that led to the establishment of the Missouri Gaming Commission, which took over the regulation of riverboat casinos. All regulatory requirements and restrictions are outlined in detail in Chapter 313 of the Missouri Revised Statutes.
Excursion gambling boats are described as ferries, boats, and floating facilities that have obtained approval from the MGC for the conduct of casino games. The legislation underwent further changes recently allowing for casino gaming in non-floating facilities. Said facilities should be located no more than 1,000 ft from either river.
One weird condition requires the non-floating facilities to feature enclosed spaces or containers with 2,000 or more gallons of water. Excursion boats must contain non-gaming areas for dining, along with gift shops where patrons can purchase Missouri-themed items. Licensed facilities can accept wagers only within hours approved by the local regulatory body and cannot take action from visibly inebriated patrons.
Persons under the age of 21 are prohibited from gambling. The riverboat casinos can offer slots and table games but accepting bets on the outcomes of sporting events is off-limits.
All gambling devices on the premises should have an average theoretical return of at least 80%, according to Section 313.805 (12). Players must exchange their money or any other negotiable currency for chips or tokens, i.e. they cannot gamble directly with currency under Section 313.817 (3) of the RSMo. They can, however, purchase chips and tokens via credit or debit cards and checks. All checks should be deposited no later than 24 hours after cashing under Section 313.812 (9), which also prohibits gambling on credit.
Gambling License Types and Requirements
Three types of licenses are necessary to legally run a commercial gaming business in the Show-Me State. Both floating and non-floating facilities require riverboat casino operator licenses granted by the MGC. The other two types of necessary permits are for gaming equipment suppliers and casino employees.
Riverboat Casino Operator Licenses
Supplier Licenses
Occupational Licenses
Riverboat Casino Operator Licenses
The applicants must provide detailed information about themselves, including records of past convictions (if any). The documents should also include information about whether or not the applicants are currently addicted to any controlled substances.
The local regulator conducts a thorough probe into the applicants’ suitability and reputation prior to granting their licenses. The watchdog may reject applicants whose licenses from other jurisdictions have been revoked or suspended. Candidates with past felony convictions are also very likely to suffer rejection.
The cost of application is either $50,000 or $15,000 for every individual under investigation, depending on which amount is higher. The initial riverboat casino operator license and the first subsequent permit are valid for one year each. All subsequent licenses expire after four years and renewing them costs $25,000. The number of riverboat casinos is capped at thirteen and no additional operator licenses are available for the time being.
Supplier Licenses
Businesses and individuals who manufacture, lease, supply, or sell gambling equipment require supplier licenses. The same applies to those who repair and maintain the gaming equipment or test it for randomness and fairness.
The application itself costs $10,000 and the fee is non-refundable in case the supplier suffers rejection. The approved candidates must pay license fees of $5,000 each year. The supplier permits require biennial renewal.
Occupational Licenses
All employees involved in the gaming process on the riverboat casinos must file applications for occupational licenses under Section 313.807 of RSMo. The employees have their past criminal history thoroughly checked often both on a state and federal level. Submitting a set of fingerprints is necessary for the purpose. Non-refundable fees are in place to cover the costs of the employee checks. Occupational licensees must pay license fees each year and the exact amounts are decided by the MGC.
Gambling Taxes in Missouri
Commercial gambling businesses in Missouri are taxed at a rate of 21% based on their gross gambling revenue. The casinos must also pay $2 in additional fees for every passenger that embarks on the riverboats. The admission fees apply per excursion. They are evenly divided between the state and the communities hosting the docks for the riverboats, with each side receiving roughly one dollar per admission.
Allocation of Taxes
Withholding Taxes for Players
Allocation of Taxes
The state’s share of the admission fees goes toward the MGC fund, with the option to deposit one cent of each dollar into the state compulsive gamblers fund. GGR-based taxes are allocated across various educational and public safety programs. A portion is used for the treatment and prevention of gambling addiction, while the rest is intended for aiding Missouri veterans.
Withholding Taxes for Players
Missouri gambling legislation treats promotional credits as regular revenue. Last but not least, the state imposes withholding taxes of 4% on all jackpot prizes patrons win on video gaming devices and table games. However, the tax rate applies only on condition the jackpot prize exceeds $1,200.
Responsible Gambling Policies in Missouri
Section 313.842 of the RSMo created the Missouri Compulsive Gamblers Fund, which is integrated within the Department of Mental Health. As part of the efforts to combat gambling addiction in the state, ¢0.01 of every admission fee from riverboat casino players goes toward problem gambling programs.
Patrons who wish to exclude themselves from gambling participation can do so by joining the Missouri Disassociated Persons Program (DAP). Once added, they can request to be removed from the exclusion list after five years. If the person requests a second exclusion after being removed, they will end up on the list for good.
Excluded individuals will not receive any marketing materials from the gambling operators and will have all their loyalty points and other comps forfeited. Authorized riverboats that hold liquor licenses cannot serve free alcoholic beverages to patrons on the gaming floor.
All gambling advertisements should present the operators’ products fairly and honestly. Misleading marketing content is prohibited. Other than that, the operators are not obliged to place on-premise displays with responsible gambling information and treatment hotlines. People under 21 cannot access the gaming areas.
Interactive Gambling in Missouri
Interactive casinos are yet to gain legal status in the Show-Me State. However, residents can legally participate in social casino gaming and play slots or table games via social casino websites or social platforms like Facebook. Social players use virtual credits rather than real money to wager. Unlike full-scale online casinos, withdrawing one’s winnings is not an option at their social counterparts.
Some overseas online casinos readily accept real-money wagers from Missourians without holding the required operator and supplier licenses from the MGC. Missouri authorities have no history of prosecuting recreational players for engaging in online gambling activities on such offshore sites.
Nonetheless, playing at them involves some risk since there is always the possibility of falling prey to a rogue operation. Little to no consumer protection is in place at some offshore casinos, not to mention deceived players cannot seek legal recourse because these operators are outside the jurisdiction of Missouri authorities.
Daily fantasy contests are legal in the Show-Me State and have been regulated since 2016 under the Missouri Fantasy Sports Consumer Protection Act. The Missouri Gaming Commission grants licenses to approved DFS operators, examines the applications of prospective licensees, and imposes sanctions on those who violate the above-mentioned legislation.
The regulatory body also collects the license and operation fees from DFS operators authorized in the state. Daily Fantasy Sports are excluded from the definition of gambling according to Section 313.910. Section 313.920 (4) stipulates only persons aged 18 or above can legally participate in such contests.
Sports Betting in Missouri
Commercial gaming facilities cannot take action on sports events at the moment but by the looks of it, this is about to change soon. A proposal that seeks to legalize sports wagering cleared the Missouri House of Representatives with an overwhelming majority of 115-33 in late March 2022.
Sponsored by Rep. Dan Houx (R), HB 2502 would repeal Section 313.800 of the RSMo and add extra provisions for the regulation of sports wagering if it passes into law. The bill received overwhelming support from local casino operators and professional sports teams. It advanced to the Senate floor in April 2022 and was approved with an 8-1 vote by the Committee on Appropriations.
Proposed Tax Rates
39 Skins for Mobile Betting
Allocation of Mobile Betting Skins
Proposed Tax Rates
However, the legislators insisted the bill be amended before returning to the Senate for further discussion. House Representatives will have to agree with the proposed amendments as well. The changes are mostly related to the taxes proposed for authorized sports wagering businesses.
The final tax rates will most likely range from 10% to 21%. The revenue collected from authorized sportsbooks is to go toward the state treasury, with compulsive gambling programs receiving $250,000 of the overall amount. Some Senators requested adding more provisions related to problem gambling.
39 Skins for Mobile Betting
HB 2502 will authorize in-person wagering at the thirteen riverboat casinos. It will also legalize remote betting via licensed websites and mobile applications. The bill proposes 39 interactive skins in total. The six commercial casino operators are to receive 33 skins and the local professional sports teams will get the remaining six.
Allocation of Mobile Betting Skins
The language of the bill indicates operators that own two or more gaming properties in Missouri can receive no more than six skins each. Out of the six operators, Bally’s Corporation is the only one to operate a single gaming facility in the Show-Me State. Missouri is home to six professional sports franchises and each one receives a single skin. The allocation of the skins will be as follows:
- 6 skins for Boyd Gaming (Ameristar Casino St. Charles, Ameristar Casino Kansas City)
- 6 skins for Affinity Gaming (St. Jo Frontier Casino, Mark Twain Casino)
- 6 skins for Penn National Gaming (Hollywood Casino & Hotel, River City Casino & Hotel)
- 6 skins for Century Casinos (Century Casino Caruthersville, Century Casino Cape Girardeau)
- 6 skins for Caesars Entertainment (Harrah’s Kansas City Hotel & Casino, Isle of Capri Casino Hotel, Lumiere Place Casino Hotel)
- 3 skins for Bally’s Corporation (Bally’s Kansas City)
- 6 skins for Missouri’s professional sports franchises – Kansas City Chiefs (NFL), Kansas City Royals (MLB), Saint Louis Blues (NHL), Sporting Kansas City (MLS), Saint Louis City SC (MLS), and Saint Louis Cardinals (MLB)
Residents and visitors of Missouri will be able to punt on a wide range of regular sports events. The bill will also authorize wagering on esports contests. Straight bets, teasers, parlays, props, over-under, exchange, and in-play betting will be available.
Conclusion
With 13 commercial casinos operating within state lines, Missouri already has a mature gaming industry that generates nearly a billion in annual tax revenue for education and various social programs. Online daily fantasy sports are the only legal form of interactive gaming at the moment, but this is about to change soon with the anticipated passage of the sports betting bill we mentioned earlier. There was also a recent push for the legalization of video lottery terminals, which, if approved, will enable Missouri to capture additional tax revenue and further expand its industry.
