Would sports betting boost Missouri school funding? There’s no guarantee, experts say

by Meg Cunningham and Maria Benevento, Beacon: Missouri
October 22, 2024

Missourians are being bombarded with ads promoting Amendment 2, a constitutional amendment to legalize sports betting. 

The betting operators urging voters to legalize sports betting say it would bring “tens of millions of dollars in education funding for our children and our schools.” 

But others aren’t so sure. It’s a familiar guarantee about casino or lottery campaigns — that betting generates money for Missouri schools. Political scientists and experts on the Missouri state budget say promising gambling revenue to education doesn’t necessarily boost school spending. 

A review by the state auditor found that sports betting could generate anywhere from zero to almost $29 million annually. The number depends on a lot of factors, such as how much Missourians bet, the amount of promotional bets that are placed tax-free and how much the Missouri Gaming Commission spends on operating costs. 

No matter how much the revenue may be, there’s no guarantee that it will mean an increase to the state’s education budget. 

“During a campaign, supporters always tout the most generous forecast of revenue coming in,” said Peverill Squire, a political science professor at the University of Missouri. “The revenues probably won’t be as high as what’s being promised.” 

How will taxation actually work? 

The revenue that comes from sports bets will be taxed at 10%, half the rate at which casino gambling is taxed. 

But skeptics say that the amendment’s language doesn’t detail the collection of that 10% tax. 

The ballot measure says that a 10% wagering tax will be imposed on any revenue. But it doesn’t outline who may collect that tax, or the methods for doing so. 

Compare that to 2022’s amendment to legalize recreational marijuana. That measure laid out a path for the tax revenue, stating the tax must be paid to the Missouri Department of Revenue. Then the department is allowed to retain a small percentage for its own costs and any remaining money should be deposited by the department into a specific fund for veterans’ health care. 

A similar path for sports betting tax collection isn’t laid out in Amendment 2. 

“There have been questions raised because the ballot measure did not include the mechanism for funding that it needs to,” said Amy Blouin, the president and CEO of the left-leaning Missouri Budget Project. 

“Some of this stuff might have to be figured out in court if it were to pass,” Blouin said. “There are legitimate questions about whether or not this was ready for prime time … if some basic requirements are missing from the language.” 

The Department of Revenue reached the same conclusion in the fiscal information it sent to the state auditor’s office about the amendment. 

“Without the identification of an agency to collect the tax, no tax can be collected. Therefore, it appears this section will not generate any revenue to the state, the (gaming) Commission or to the Compulsive Gaming Prevention Fund,” the fiscal note said. 

Lawyers representing the Amendment 2 campaign wrote in a memo in January that the Department of Revenue has the independent authority under the Missouri Constitution and state law to collect taxes. 

“The Department has authority to collect taxes (including this new tax) and it should know that,” the memo said. 

Outside of a potential fix in the courts, the top Democrat on the Missouri House Budget Committee said the legislature may have to work around the amendment and come up with language to actually collect the tax. 

But he’s not too optimistic. 

“Historically, it’s not easy to get a Republican legislature to pass a bill about this topic to begin with, let alone a tax collection bill,” said Rep. Peter Merideth of St. Louis. 

How do school districts feel about Missouri Amendment 2? 

Public school districts and education groups are largely neutral on whether or not the amendment should pass. But some doubt whether it would put more funding in classrooms. 

During an Independence School Board meeting in October, Superintendent Dale Herl urged voters not to let promises of education funding sway their vote on Amendment 2. 

He said tax revenue isn’t likely to add to education spending, based on school districts’ experience with other gambling taxes in the past. 

“My belief is that all it’s going to do is further supplant money that we would already be getting,” he said.  

Voters should instead reflect on what they think about sports betting itself, he said. 

“If you don’t want to go across the state line to place your Chiefs bet or Royals bet, I would say vote yes,” he said. “If you’re opposed to sports betting in Missouri, then vote no.” 

Spokespeople for Kansas City Public Schools, North Kansas City Schools and the Lee’s Summit School District said they had no position on the ballot measure and no comment on its potential impact. 

The Missouri Association of School Administrators said it has no position on Amendment 2 and pointed to a handout from the Missouri School Boards’ Association. 

The MSBA also doesn’t take a position on Amendment 2. But its handout casts doubt on how much money would go to education, especially for public schools. 

Amendment 2 doesn’t lay out what grade levels or services the funding could cover, or specify whether it will go to public or private schools. 

In contrast, Amendment 5, a separate question on the Nov. 5 ballot about authorizing an additional casino in the Lake of the Ozarks, says tax revenue would go toward early literacy programs in public elementary schools.

The lack of specificity “means that the state revenues from Amendment 2 could go to private and parochial schools in the state, not just public schools,” the MSBA handout says. “This is relevant as the state legislature continues to expand the state’s voucher programs and moves towards privatization of public education.”

Missouri’s state-sponsored private school scholarship program is currently funded through a system of offering donors tax credits, but some lawmakers have proposed that it be directly funded by the state. 

The MSBA handout also notes that if estimates are correct, schools around the state would only receive about $29 million annually, about 0.7% of the approximately $4 billion of state general revenue used to fund the K-12 education budget last year. 

That’s without factoring in the hit casino tax revenue for schools could take from competition with sports betting, MSBA said. 

The Missouri National Education Association, a teachers union, also takes no position on Amendment 2. The group’s summary notes that the amendment doesn’t authorize any specific entity to collect the tax and has few requirements for how the money can be used. 

The Missouri State Teachers Association, a professional organization, also doesn’t take a position on the amendment. 

“While there may be financial implications relating to education, the heart of this ballot question asks if Missourians would like to expand gambling in our state,” Matt Michelson, director of education policy, said in an email. “MSTA has a long tradition, and guidance from members, to maintain a strong focus on issues that directly impact public education.”

The measure has backing from both of Missouri’s candidates for governor, Democratic Rep. Crystal Quade and Republican Lt. Gov. Mike Kehoe. It also has backing from major sports teams in Missouri, including the St. Louis Cardinals and the Kansas City Chiefs, as well as The Kansas City Star and the St. Louis Post-Dispatch. 

“It is currently estimated that roughly $2 billion a year are placed in bets using offshore gaming websites, money that is currently not going back into our education system,” the campaign’s website reads. “By legalizing sports betting we are ensuring tens of millions of dollars in education funding for our children and our schools bringing that economic activity back to Missouri.” 

An August poll from St. Louis University and YouGov found that 50% of Missourians supported Amendment 2, while 30% were opposed.. 

That support hasn’t come without major spending from the campaign backing the amendment. The latest campaign finance reports show that the group has raised $21.5 million since its launch. 

The rocky relationship with gambling revenue and the General Assembly 

Aside from the unknown path to collect revenue, the amendment’s language doesn’t outline a guarantee that schools will actually get more funding when it comes to the overall state budget. 

The amendment’s language says the revenue will be appropriated to elementary, secondary and higher education schools in the state, after two conditions are met. First, the revenue will be used to reimburse the Missouri Gaming Commission for any costs it takes to oversee sports betting in Missouri. Second, a maximum payout of $5 million will go to Missouri’s compulsive gambling fund. 

Whatever revenue is left over would then be appropriated to schools after those two payouts are made. Critics of the measure say states such as Kansas and Indiana haven’t seen as much revenue as what was promised. Part of that reason is because revenues from promotional bets or free credits aren’t taxed.

Plus, a provision that accounts for “negative revenues” for sportsbooks might actually limit how much is being taxed. If exemptions and deductions exceed how much money sportsbooks take in, they aren’t taxed for the month. 

“If the amount of adjusted gross receipts in a calendar month is a negative figure, the licensee shall remit no sports wagering tax for that calendar month,” the constitutional amendment reads. “Any negative adjusted gross receipts shall be carried over and calculated as a deduction in the subsequent calendar months until the negative figure has been brought to a zero balance.”

The largest exemption for sportsbooks is always paying out the winners. That cuts into the company’s profits on paper and, consequently, its obligation to pay taxes. In February 2023, Kansas only collected $1,134 in taxes on sports betting because so many people won their bets. There were $194 million in wagers and $194.8 million in payouts.

To counter that problem, the campaign argues that because Missouri’s amendment includes a 25% cap for promotional or free credit bets for each sports betting operator, the state will collect more revenue. 

A study prepared for the campaign backing Amendment 2 found that Missouri sports betting operators would see $3.4 billion in bets placed in the first year of operation. The study estimated that total revenue would be $335 million, but more than $272 million of that would be from tax-deductible promotional credits. After deducting federal fees and uncollectible fees, Missouri would generate approximately $4.7 million in state tax revenue outside of license fee revenue. 

Lawmakers, though, could move around other parts of the state’s education budget. 

“The reality is there’s really not a lot you can do to protect monies from the General Assembly,” said Squire, the University of Missouri professor. “It’s very hard to limit their ability to shift budgets or shift monies around.” 

Squire pointed to the formula for funding public school transportation. It’s something that lawmakers put on the back burner in the overall education budget and haven’t always fully funded, leaving districts to take up the costs themselves of running buses and hiring drivers. 

“They can say, ‘Well, here’s new money coming into one area,’ and then slip money out in another area,” Squire said. “Given the experience that we’ve had with various programs that are supposedly protected, the legislature really won’t be constrained by any of the promises that have been made.” 

The campaign directed The Beacon to an Oct. 9 memo prepared by Alixandra Cossette, a Jefferson City attorney who filed the initiative petition. The memo says that the General Assembly will be tasked with interpreting Amendment 2’s language plainly, and that the money should be used as a supplement to already existing education budgets. 

A 2007 study of nationwide state lottery revenue spending from lawmakers found that some states outline in their legislation that lottery revenue must be used to supplement, not replace, funding that goes to education. Other states aren’t as specific, leaving room for money to be swapped with other parts of the budget. 

Some states also direct lottery revenue to specific funds related to K-12 public education, while others say the money should be spent on education more broadly. 

“While earmarking on this level falls short of ensuring lottery dollars are not fungible, its transparency and independence from the general education fund make it easier to measure the extent to which lottery dollars supplement previous public education spending,” the study concluded. 

Merideth also pointed to the year-to-year process of outlining the state budget. What happens with the revenue one year may not happen the next, he said. 

“The budget is the budget, and essentially, the legislature can’t tie the hands of future lawmakers on the budget,” said Merideth, the representative from St. Louis. “So it’s going to be a fight every year, basically, to try and make sure that they’re funding schools, just like it’s been every year.” 

This article first appeared on Beacon: Missouri and is republished here under a Creative Commons license.

Missouri Amendment 5: Voters can OK or reject a new casino at the Lake of the Ozarks on Nov. 5

by Meg Cunningham, Beacon: Missouri
September 16, 2024

Missourians, long restricted to sites along the Missouri or Mississippi rivers for casino gambling, will decide whether to add another river to that list during the Nov. 5 election. 

Amendment 5 will ask Missouri voters if they want to allow an additional casino on the Osage River, near the Bagnell Dam at the Lake of the Ozarks, on the south side of U.S. 54. 

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The plan is spearheaded by Bally’s, which operates a casino in Kansas City, and RIS Inc., a developer based in Eldon. The amendment is the result of a 10-year effort to build a casino and entertainment center at the lake. The site is part of the Eagles’ Landing development, which sits on both sides of U.S. 54. 

The proposal would amend the Missouri Constitution to allow an additional casino on the Osage River. The plan also includes a hotel, a convention center, restaurants and other attractions. It would override a state law that only allows 13 casino licenses by adding a 14th dedicated to the Osage River proposal. 

The proposal needs a simple majority statewide to pass. The revenue from the state’s gaming tax, estimated to be $14.4 million annually, will be allocated toward early childhood literacy efforts. 

The details of Amendment 5’s casino plan

Members of the Osage River Gaming and Convention Committee are the main backers of the proposal. The group has been eyeing a casino at the lake for years, toggling between pursuing the effort through the legislature or via a citizen-led initiative petition. 

Since lawmakers have the power to place questions on the ballot for voter approval, that was one path the committee started pursuing in 2020, after it announced its plan for the Lake of the Ozarks development. 

Former state Rep. Rocky Miller, a Republican from Osage Beach, initially spearheaded the legislative path to changing the constitution. After the bill failed in 2022 and 2023, the committee announced it would pursue the change through the initiative petition process. 

Backers of the proposal say the destination will create 500 construction jobs and create 700 to 800 permanent jobs.

To read the full text of the amendment, click here.

The city of Lake Ozark gave its backing to the plan in December. Local governments are estimated to receive around $2.1 million annually in admission and other fee revenue. 

The state estimates it will take in $14.3 million in gaming tax revenue annually, which will be dedicated to supporting early childhood literacy efforts. 

The amendment comes amid an effort from Osage Nation to build a casino at the Lake of the Ozarks. Osage Nation acquired land at the Lake of the Ozarks in 2021 and officially launched a plan to build a casino, which requires coordination with the federal government and clearance from the governor. 

The years-long effort to get Amendment 5 on the ballot

After a 2009 fire destroyed a gambling riverboat, the backers of Amendment 5 saw an opportunity to launch a casino at the Lake of the Ozarks, the Springfield News-Leader reported. 

The group of investors huddled with the intention of pursuing an additional license and getting voter approval to build on a new river. 

By 2018, the investor group was ready to launch a citizen-led initiative petition effort to get voter approval for gambling on an additional river. But Miller suggested the legislative route because it would cost less. 

After legislation struggled to get off the ground for a number of years, in part due to heavy opposition from Osage Nation, investors turned back to the initiative petition route, which was successful in 2024. 

This article first appeared on Beacon: Missouri and is republished here under a Creative Commons license.

Bird flu has hit cows in Kansas and sparked precautions in Missouri. Here’s what that means for you

by Suzanne King, Beacon: Missouri
June 12, 2024

Don’t drink raw milk.

It’s one piece of public health advice almost every doctor, scientist and public health official can get behind. Especially as bird flu jumps from chickens to cows to a handful of farmworkers.

Yet on the north side of Excelsior Springs, Be Whole Again Farm hasn’t noticed the public health guidance having much effect on business. The 38-cow dairy sells about 750 gallons of unpasteurized milk every week.

Rachel Moser, who owns the farm with her husband, Scott, said public health warnings about raw milk are overblown. And selling it directly to consumers is perfectly legal in Missouri.

As she has reminded her customers, bird flu has yet to infect a Missouri cow. Moser said her farm monitors every cow every day for signs of illness and always has. If there were any concern, milk would be discarded. So Moser said the likelihood of someone catching the virus from drinking the raw milk they sell is extraordinarily low.

“Are they honestly expecting every raw milk dairy to just shut down?” she said early one June morning, while cows rotated through the farm’s milking parlor, munching on barley grass as milking machines whirred in the background.

Erosion of trust in public health

The reality is that a growing group of people is wary of public health words of warning and distrustful of the agencies behind them. Worn out after years of COVID precautions, polling has shown that people — especially Republicans — lost trust in public health officials as the pandemic wore on. 

Just last week, Republican lawmakers held hearings on how the COVID pandemic began and questioned Dr. Anthony S. Fauci, the now-retired government immunologist, about advice he gave as the virus spread.

Public health experts worry that growing distrust could pose its own public health risk. If people, especially in large numbers, don’t listen to doctors and scientists, experts worry that the job of corralling the next disease spread becomes more daunting.

“Trust is foundational,” U.S. Centers for Disease Control and Prevention Director Dr. Mandy K. Cohen said last week at the national convention of the Association of Health Care Journalists. “But, also, trust takes time. … You can lose trust quickly, but (building) trust does take time.”

Cohen said public health agencies need to double down on getting accurate information to the public. In the face of growing misinformation on the internet and elsewhere, Cohen said public health agencies need to “flood the zone” with reliable facts.

“It’s important to say what you don’t know and that you’ll come back and answer more questions the next day,” Cohen said. 

We are better prepared for bird flu

As for the current strain of bird flu — highly pathogenic H5N1 avian influenza — Cohen said the United States is prepared. And even if the spread into humans increases, the situation looks nothing like what unfolded when COVID started.

“Avian flu is something we’ve been studying and preparing for for decades,” she said. “COVID (was) a completely novel virus where we did not have tests, we did not have treatment, we did not have vaccines.”

The country has all of that for bird flu, Cohen said. Vaccines would need to be manufactured, but the country has effective candidates ready to go.

As things stand now, the virus is considered low risk for humans. There have been three known cases, although many experts believe that is an undercount since testing has been limited. Confirmed cases were in dairy farmworkers in Texas and Michigan whose symptoms were mild, primarily conjunctivitis — an eye inflammation commonly called pink eye.

The CDC said it is monitoring the situation carefully and has recommended that farmworkers and others in close contact with animals take precautions like wearing masks, gloves and other personal protective equipment when working with infected animals.

But among animals, the situation is different. This strain of the virus is spreading rapidly around the world through birds and mammals. 

Scientists are surprised— and concerned— about the unusual spread and some are calling it an ecological disaster. It’s been lethal to a growing number of species, including seals, sea lions, owls and bald eagles. In January, scientists detected the virus in a red fox in Jackson County.

Testing and tracking the virus is critical

Since the disease showed up in chickens, tens of millions have died. Once it infects a poultry farm, entire flocks must be destroyed. The U.S. Department of Agriculture compensates farms for those kinds of losses to encourage them to take action. Federal taxpayers spent more than $500 million on payments like that in 2023, according to The New York Times.

Now the USDA is giving dairy farmers financial incentives to encourage them to test cattle.

Experts said it is vitally important that the virus is tracked and tests are done so scientists know how it is evolving or mutating.

When the virus jumped from birds to cows — probably because a bird dropping contaminated a cow’s food or water supply — it did it without changing or mutating significantly. The people who got sick were dead-end hosts. They didn’t pass it on.

The danger, scientists said, is that the virus will find a way to transform so it can circulate among humans. The more it spreads, the more likely that is. 

The 1918 influenza pandemic that killed tens of millions of people started with an avian flu, though not the strain circulating now.

If it jumps from cows to pigs, said Dr. Keith Poulsen, director of the Wisconsin Veterinary Diagnostic Laboratory, the virus could mutate so it could bind to the respiratory tract, which would make it more dangerous to people.

“Pigs are like little influenza incubators,” he said. “Influenza viruses tend to change in pigs.”

The USDA has confirmed cases of the virus in dairy cattle herds in 12 states. That includes Kansas, where four farms in the western part of the state had outbreaks in late March and early April. So far, no cases of the virus in cattle have been reported in Missouri. 

When a cow is infected, it doesn’t die. Farmers have to take its milk out of production and that costs them money. But after a period of quarantine, the farmer can go back to milking the cow.

Still, financial consequences of lost production can be significant and give farmers good reason to do their part to contain the virus, said Dr. Justin Smith, animal health commissioner for the Kansas Department of Agriculture.

“The industry itself approached it with a wary eye,” Smith said of the virus. “But at the same time, they didn’t dismiss it. They understood that there was truly an impact.”

Scientists are unsure how the virus spreads from cow to cow. But it has found a welcoming environment in the cows’ udders. From there, it may be spread from cow to cow through milking equipment. 

Minimizing spread to people

The danger right now is that infecting domestic cows gives the virus many more chances to reach humans. And every time it finds a human host, it has a chance to become more dangerous.

People need to minimize that scenario, said Richard Webby, a scientist who studies influenza at St. Jude Children’s Research Hospital.

This virus was first detected in humans in 1997. But the virus circulating now is quite different — something like that original viruses’ great-great-grandchild, Webby said.

Over the years, the virus has infected nearly 900 people, and shown a mortality rate of around 50%. But that rate is likely exaggerated, since only the sickest patients may have been diagnosed and counted. Still, scientists urge caution.

“This can be an extremely dangerous infection to get,” said Dr. Dana Hawkinson, medical director of the Infection Prevention and Control program at The University of Kansas Health System. “It’s important to understand the dangers.”

So far, all three human cases involved farmworkers who were in close contact with infected cows. The CDC says there’s no indication that the cases are connected, which means human-to-human spread still isn’t happening.

In May, the CDC recommended that states distribute personal protective equipment to farmworkers. Among steps the federal government is taking to prepare, states can request face shields, face masks, gloves and goggles from the national stockpile.

Officials emphasize that the food supply is safe. While studies have found remnants of the virus in the milk of infected cows, studies have shown that the process of pasteurization, heating milk to a specific temperature for a set period of time, kills the virus and makes milk safe to drink. Meat consumption is also considered safe.

But they continue to warn against consuming milk that hasn’t been pasteurized. Scientists speculate that cats that died on a Texas dairy farm drank the milk of infected cows. 

“I just want to reinforce that milk is safe and our dairy products are safe,” said Chris Chinn, director of the Missouri Department of Agriculture. “Pasteurization works. And, you know, I think that’s the most important message that we can get out. … Our food supply is safe.”

This article first appeared on Beacon: Missouri and is republished here under a Creative Commons license.

Lawmakers clarify some confusion to let more counties freeze property taxes for seniors

by Meg Cunningham, Beacon: Missouri
May 31, 2024

Missouri lawmakers gave counties a dose of much-needed clarity in May when they passed a bill aimed at clarifying a 2023 law that lets counties pass a senior property tax freeze, aimed at those 62 and older. 

The law passed last year gave counties the power to freeze property tax rates for Missourians who were eligible for Social Security. But the law left room for interpretation — and confusion. For instance, it didn’t include an outline for how counties should go about the freeze or who would qualify. 

Counties weren’t sure how to interpret “eligible for Social Security.” Did that mean 62 and older? What about people on pensions, like retired teachers or railroad workers? Were they out of luck? 

Some counties thought an annual application would be required, and others wanted to put a cap on home values eligible for the tax break. 

As a result, only the state’s larger counties have been bold enough to pass the freeze. Jackson, Platte and Clay counties passed the freeze in the Kansas City area, while St. Louis, St. Charles and Greene counties have passed the freeze in other parts of the state.

In the meantime, smaller counties took a wait-and-see approach — seeing what the General Assembly might yet do and measuring the potential impact on what a freeze would mean for  libraries and school and fire districts. 

Lawmakers answered some of those questions this year with a bill sponsored by Sen. Tony Luetkemeyer, a Platte County Republican who backed the original bill giving counties the power to freeze rates for seniors. 

They also conceded that the freeze law would likely need future updates. But Luetkemeyer, pointing to legislative gridlock, suggested that lawmakers delay making more changes to the bill because it was already so far along in the process. 

The clarification bill has yet to be signed by Gov. Mike Parson. 

What answers does the bill provide for Missouri’s senior tax freeze?

Counties were largely unsure which property owners could qualify for the freeze. Initially, the bill said that Missourians eligible for Social Security would be able to receive the freeze.  

But counties were afraid to open themselves up to lawsuits depending on how they interpreted that language. So lawmakers clarified that part of the bill by changing the language to Missourians 62 and older. 

The senior property tax freeze came amid property tax assessments that shocked many Missourians. The 2024 bill also clarified that the freeze wouldn’t work in reverse. If the assessed value of property dropped, so would the tax bill even if the owner had benefited from the freeze. 

The bill also makes clear homeowners who are behind on their property taxes won’t be eligible for the freeze until they catch up payments. It also clarifies that if homeowners make improvements that raise the assessed value of their home, their rate will be increased to reflect those improvements. 

Previous language also allowed for county residents to petition to pass the freeze if local officials don’t enact it. The new bill would let counties go back and tweak their programs without voter approval. 

It also gives counties full control over how to tailor their property tax freezes. 

This article first appeared on Beacon: Missouri and is republished here under a Creative Commons license.