Missouri Puts Online Betting Tax Increase Proposal on Hold

Five months into Missouri’s new sports betting market, lawmakers have chosen not to push through a sharp tax hike that would have reshaped the industry.

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The original plan called for raising the effective tax rate on sportsbooks from 10% to 34%, one of the highest in the nation, but that language was stripped out in committee. Instead of rushing into a major change, legislators said they want more time to see how the market performs before revisiting tax policy. 

Representative Jeff Myers backed the decision, noting during Tuesday’s hearing that the state should first study sports betting data before making further moves. According to Covers, the substitute bill that advanced shifted focus away from sportsbooks and toward riverboat casinos, raising admission and licensing fees.

Missouri reports low tax revenue despite $1.5bn+ handle

Missouri’s sports betting market has already crossed the $1.5 billion mark in total wagers, but the tax returns tell a very different story. 

The Missouri Gaming Commission’s fiscal year 2026 report through March shows that nearly all of the betting activity came from mobile platforms, with March alone producing about $329.4 million in handle. 

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Yet, despite the large sums being wagered, taxable adjusted gross revenue remains thin. Sportsbooks are allowed to deduct promotional free bets from their tax obligations, and that practice has kept the state’s revenue low in the opening months. So far, adjusted gross gaming revenue stands at roughly $3.6 million, generating just over $4 million in tax receipts across the first four months of legal betting. 

The mismatch between big betting handles and modest tax collections has become a talking point in legislatures across the country. 

States such as Illinois, Ohio, and Massachusetts have already raised rates or introduced tiered systems aimed at high‑earning operators. Missouri’s choice to leave sports betting taxes out of its latest bill shows a deliberate intent to wait and study the market first before deciding to make a move.

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Source: Covers