00:00Sam, you noted at the end of last month that Missouri sports betting handle fell about 30% in its
00:06second month, the revenue dropping about 50%.
00:08Online sports books issuing nearly $600 million in promo credits during the month of December, deductions that obviously, as you
00:16said once again, gutted taxable revenues.
00:19And so some states are always going to do better than others, depends on the appetite, obviously, for gambling.
00:24And I'm sure the teams at whatever the sport that are part of those states, how rapid the fan bases
00:30are, these all come into play as well.
00:32But what do you make of the early struggles, failures, even in the state of Missouri as it relates to
00:39sports betting handle?
00:41Yeah, there's actually been a lot of good success for the sports betting companies in terms of how much people
00:48are betting in the state.
00:49It's just the tax system, which is kind of messed up right now.
00:52Now, Missouri launched in December, but they've only made, like you mentioned, about $660,000 in taxes.
00:59And that's because the state allows these operators to deduct all the promos they're putting out from their taxable revenues.
01:07So you have a situation where a company like FanDuel, for example, took $200 million in handle, paid out $166
01:13million in winnings.
01:14But they also issued about $55 million in promotions, which means they got to write that all off of their
01:20taxable handle.
01:20And FanDuel hasn't paid any taxes in Missouri for the first two months.
01:24So when you're talking about the biggest sports betting company there is not paying taxes, the lawmakers are going to
01:30come back to the drawing board and say, OK, we need to get rid of these promo deductions, as we've
01:33seen a number of other states do as well.
01:36If this new law passes, which is being proposed in Missouri, they would have made about 57 times more in
01:42taxes than they've made already in the first two months.
01:44That's quite a difference.
01:46And I'm kind of surprised that they didn't have this to begin with.
01:49We kind of saw this early on with sports betting.
01:51States realizing, oh, they're deducting a ton of promos.
01:54We're making no tax revenue that we projected.
01:57Let's go out and figure out a way to change it.
01:59I think Missouri, late to the game with sports betting, obviously, is late to the game as well with this
02:02tax change.
02:04But we'll have to see if it passes.
Comments