Another week, another state looking to up the ante in terms of taxation rates on legal and regulated sports betting. Missouri Rep. Jeff Knight has introduced
Bill HB 3533. If passed into law, the state would begin taxing adjusted gross receipts from sports betting operators to 24%.
The current taxation rate on sports betting in the Show Me State is set at 10%. Under this new bill, that wouldn’t be changing. The new tax proposal only takes into account the adjusted gross receipts from sports betting. That would be each sports betting site’s operating revenue after paying out winnings to players, but before any of the site’s promotional costs are deducted from the total revenue earned.
In general, states allow the sportsbooks to deduct the promotional and bonus costs incurred from revenue earned. According to
reporting from the Missouri Independent, those write-offs will keep the eight sports betting sites operating in Missouri’s legal and regulated market from paying any tax.
The total amount of write-offs for all eight Missouri sportsbooks so far is $33.8 million. Missouri only introduced legal and regulated sports betting last December. Heading that tax write-off list are giants DraftKings ($20.6 million) and FanDuel ($8.1 million).
Between them, DraftKings ($54.4 million) and FanDuel ($65.8 million) have garnered $120 million in profits from Missouri sports betting. Yet neither sports betting site has paid a single penny in taxes thanks to those large write-offs from promotional and bonus bet offers.
Missouri has realized just $521,000 in tax revenue since legalizing sports betting.
"It's not as much, obviously, as we want to hope, you know, going forward," Missouri Gaming Commission Chairman Jan Zimmerman told
KMBC.com.
Knight’s bill has a long way to go before becoming a law. It’s been read twice before the state house. However, no hearings are scheduled to debate the bill, and it’s not currently on the calendar for introduction.
Missouri isn’t the only state looking to make more revenue by placing more taxes on sports betting
There’s been a rash of tax changes in recent months affecting states that offer sports betting in the legal, regulated U.S. market.
In her state budget for fiscal year 2027, Arizona Governor Katie Hobbs wants to see sports betting taxation rates jump from 10% to 45% in her state on Arizona’s major revenue-earning sportsbooks.
Michigan Governor Gretchen Whitmer also put forth a proposal for a massive increase in sports betting taxation while presenting her state budget. She wants the tax rate to be hiked from 8.4% to 36%. Whitmer is also seeking the elimination of bonus bet deductions from sportsbook revenue, similar to the Missouri proposal.
She also proposed an additional per-bet tax. This new proposal would see a 25-cent tax added on every sportsbook bet placed in the state, up to the first 20 million bets. Beyond that threshold, every wager would be taxed at 50 cents per bet.
Illinois implemented a similar per-bet tax that went into effect in November 2025.
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