Missouri’s Amendment 2 doesn’t guarantee millions of dollars for schools each year from sports betting

Missourians heading to the polls during this general election cycle will vote on Amendment 2, which would legalize sports betting on college and professional games in the state.

Missouri would join 38 states that have legalized sports betting in some form if voters in the state approve Amendment 2.

As Election Day draws closer, ad spending from groups both for and against Amendment 2 has ramped up. 

Winning for Missouri Education, the group behind Amendment 2, claims in its ads that the measure would generate tens of millions of dollars annually, or $100 million over the next five years, for schools in the state. Opponents of the amendment say there’s no guarantee that would happen.

VERIFY has received many questions from readers who are confused about what Amendment 2 does and want to know whether it guarantees millions of dollars for schools in the state each year.

THE QUESTION

Does Missouri’s Amendment 2 guarantee millions of dollars of revenue for schools each year?

THE SOURCES

• Missouri Amendment 2 text
• Missouri State Auditor’s Office Fiscal Note published in October 2023
• Peverill Squire, Ph.D., a professor of political science at the University of Missouri

THE ANSWER

No, Missouri’s Amendment 2 does not guarantee millions of dollars of revenue for schools each year. There’s a wide range of how much money the amendment could bring in for schools, if any 

WHAT WE FOUND

If Amendment 2 passes, sports betting would be legal in the state of Missouri and operators would have to pay a 10% tax on betting revenue.

The amendment says some revenue from that tax will be allocated to schools. However, there’s no guarantee that legalized sports betting will actually generate any tax revenue for the state and if it does, all of that revenue is not required to go to education.

“There’s no guarantee that any money will necessarily flow in [to schools] or certainly very much money,” Peverill Squire, Ph.D., a professor of political science at the University of Missouri, told VERIFY.

Gambling operators would be able to deduct their costs against their profits, which could decrease or even eliminate any taxes owed to the state. 

Missouri state government entities estimate a wide range in possible tax revenue collected each year if sports betting is legalized, according to a summary of a fiscal note issued by the state auditor’s office in October 2023. 

“Because the proposal allows for deductions against sports gaming revenues, they estimate unknown tax revenue ranging from $0 to $28.9 million annually,” the fiscal note summary says. 

If the state does receive tax revenue from sports betting, all of that money wouldn’t automatically go toward education, either. 

“The money will have to go to cover some administrative costs and also programs to help people who have gambling issues, and then the money that's left over after deductions and those particular set of costs would be split among a wide range of educational entities,” Squire said. 

A spokesperson for Winning for Missouri Education provided a report from a pro-gaming research firm that argues the government’s revenue estimates are too low and the state could see over $100 million for education in the first five years that Amendment 2 is in effect. 

Here’s what the text of Amendment 2 says about tax revenue: 

“A wagering tax of 10% is imposed on the adjusted gross revenue received from sports wagering conducted by each licensee and each sports wagering operator acting on behalf of a licensee.

The annual revenues received from such tax shall be appropriated for institutions of elementary, secondary, and higher education in this state: provided, however, that an appropriation to such educational institutions shall be made only after such annual wagering tax revenues are appropriated as follows: 

(1) to reimburse the reasonable expenses incurred by the Commission to regulate sports wagering in the state to the extent that the Commission has not been fully reimbursed for such expenses from the sports wagering fees collected by the state; and 

(2) the greater of 10% of such annual tax revenues or $5,000,000 to the Compulsive Gaming Fund.”

That means the tax revenue would first go toward reimbursing the Missouri Gaming Commission’s expenses for regulating sports betting that are not covered by other fees the state collects. Then, the rest of that money up to $5 million goes into a fund to prevent gambling addiction.

Any leftover money is required to go toward education. Some ads claim the money would lead to increased pay for teachers, but Amendment 2 does not specify where the money for educational institutions has to go.