Missouri will decide whether to legalize sports betting in Missouri through Amendment 2, a referendum on the ballot in this year’s general election. Supporters say it will help the state with education funding, but critics say the amendment leaves more questions than answers.
The amendment is being pushed by a group calling itself Winning for Missouri Education, a coalition of sports teams and gambling companies.
Sports betting is legal in 38 states across the country, including seven states neighboring Missouri.
“Every day, tens of thousands of Missourians bet on sports by using illegal offshore websites or by traveling to one of seven neighboring states,” said a spokesperson for Winning for Missouri Education. , said Jack Cardetti. “As it stands, Missouri isn’t getting any benefit out of it.”
The coalition commissioned a study from Eilers & Krajcik to find out exactly how much money Missouri is missing out on. Based on revenue from comparable states such as Indiana and Ohio, the group calculated about $560 million to be wagered in the first five years.
The language of the ballot measure would impose a 10% sales tax on all gambling revenue collected. That means Missouri could receive $100 million in tax revenue over five years.
The money will cover the cost of sports betting regulations, fund gambling addiction treatment and contribute to the state’s education budget, according to the Missouri Education Award.
But representatives of Missourians Anti-Deceptive Gambling, a coalition that opposes the Second Amendment, said the voting law’s language is misleading.
“We find it highly questionable that they do not contain non-alternative language,” said Brooke Foster, a spokeswoman for the group.
Non-substitutable language ensures that funds raised for specific purposes are added to the budget rather than replacing state-covered funds, especially when it comes to education funding.
In the case of Missouri education, gambling revenue from riverboat games and the Missouri Lottery is factored into the foundation’s formula, which calculates funding needed for schools based primarily on student attendance.
Dylan Risen
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kansas news service
Online sports betting app promotion.
According to Kari Monsees, Deputy Director-General for Finance and Administrative Services at the Department of Elementary and Secondary Education (DESE), this foundation mechanism is the main source of funding for the Department of Elementary and Secondary Education (DESE).
This year’s budget includes $476 million in gaming revenue earmarked for schools, which Monse said is part of the foundation’s overall plan.
“We’re going to fund [the foundation formula] It’s to meet the state’s adequacy goals, so that’s part of that total,” Monse said. “I won’t explain [gaming funding] In addition to what they were already getting. ”
DESE is a government agency and cannot comment on voting initiatives. He said it will be up to Congress to decide whether gaming revenue will replace existing funding or provide additional funding.
This is something that worries former American Federation of Teachers (AFT) Missouri state president Bob Dories. He said he doesn’t like the idea of gaming revenue replacing existing funding in the education budget.
“All the people in Jefferson City did was take the money that was raised and put it into the general operating budget and put that money back out of education and replace it,” Dorries said. “You’re just playing a shell game.”
Mr. Dorries has been the band director at his school for 23 years. He said he cares about the development of his students and wants funding to support their education. But when he looked at the initiative’s petition, he became disillusioned with how much money Missouri could actually get.
“It’s hard to believe we’re going to make a penny,” Dorries said.
Jason Roberts, president of AFT in Kansas City, has similar concerns.
“I thought it was great at first,” Roberts said. “And that’s what I thought until I started digging into it.”
One of Roberts’ main concerns is the prospect of teacher pay increases. Because the state allocates funding to districts, it is up to districts to decide how to spend the money.
“That doesn’t guarantee that every teacher in the state will get a raise,” Roberts said. “The school district might decide it needs a new soccer field. Well, that doesn’t raise anyone’s salary.”
Jason Roberts, president of the American Federation of Teachers in Kansas City, said he is concerned that Missouri teachers will not receive raises.
At the district level, Michelle Baumstark, communications director for Columbia Public Schools, said the Second Amendment could work similar to how gambling revenue from lottery and riverboat games works now. explains.
Once the proceeds are allocated to the foundation’s formula, school districts receive funding each month as part of their DESE payments.
“Those funds will be used for the district’s operating budget,” Baumstark said in an email. “So…we’re not receiving funding directly from the lottery, we’re receiving funding indirectly through the state education funding stream.”
That money could come in the form of things like transportation costs and financial aid for students at two-year colleges. Although state funding helps, 65 percent of Columbia’s education funding comes from local taxes.
“We are grateful for the continued support of our local community’s public schools,” Baumstark said. The Columbia Public School System has not taken a stance on sports betting efforts.
Roberts said his concerns grew after reading the state auditor’s report on the Second Amendment. The state comptroller’s office calculates that Missouri’s revenue could range from $0 to $28.9 million annually, as listed on the ballots Missourians receive.
Zachary Linhares
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beacon
The president of Kansas City’s teachers union is concerned about how the district will spend even with the new money from sports betting.
These predictions were made using revenue data from Indiana, which legalized sports gambling during the pandemic. A win for Missouri Education officials said the report underestimated how much revenue Missouri could actually earn because the pandemic artificially depressed Indiana’s revenue.
Still, the Missouri Department of Revenue and the Missouri Gaming Commission reported that the language on the ballot poses some obstacles to funding Missouri schools.
The Commission states that the funds raised will first be used to reimburse the Commission’s costs in regulating gambling, then to fund the Compulsive Gambling Prevention Fund, and finally to fund education. said.
Still, the commission said it does not anticipate any sports betting tax revenue from possible deductions for gambling operators. First, operators are allowed to deduct 25% of the total cost of any promotion or free play they run.
Additionally, the ballot measure would allow businesses to deduct “federal taxes” when filing taxes with the state. The commission said the ambiguity in the language could result in businesses deducting federal income, employment and other federal taxes when reporting receipts.
After all of these deductions, if the receipt shows negative revenue, the operator does not have to pay taxes to the state.
“This will impact on the Commission’s ability to meet its reasonable expenses,” the commission said in its report. “It also limits or eliminates contributions to gambling addiction funds and education in Missouri.”
The Eilers & Krejcik study, which calculated $100 million in taxes, only considered the federal sales tax credit. The company said in an email that it did so under the guidance of Winning for Missouri Education.
This is a situation the Wichita Beacon previously reported on when calculating taxes paid by gambling operators in Kansas. Their investigation found that of the $194 million generated in February 2023, only $1,134 was paid in taxes due to business deductions.
Roberts said all of these factors leave more questions than answers about the amendment’s impact on Missouri education. In the end, they feel dissatisfied with being used as “political pawns.”
“If this thing passes and all this money starts flowing, that would be great,” Roberts said. “But using teachers as political pawns for voting campaigns is completely unacceptable.”
As voters head to the polls in November, DESE’s Monse said while there is validity on both sides of the debate, there are caveats to keep in mind.
“I think there’s a misconception, at least, that riverboat games and lotteries are going to solve all of our education funding problems,” Monse said.
“A Victory for Missouri Education” explains why Eilers and Krajcik’s report called for only some taxes to be included, and how additional deductions available to sports betting operators will help fund Missouri’s education. He did not respond to questions about whether the system will essentially remain the same.
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