Missouri Pulls Sports Betting Tax Increase Proposal
Mike Goodpaster Published 24/04/2026
A new bill that was proposing an increase in the taxes on sports betting in Missouri was suddenly pulled from discussion this week by state lawmakers. No reason was given to explain why the bill was pulled.
Missouri currently charges a 10% tax on gross gaming revenue earned by Missouri sports betting sites. That’s below the national average. It was set in the state constitution as part of the 2024 ballot measure that led to the legalization of sports. The new bill would have bolstered this tax grab by an additional 24%. At 34%, Missouri’s sports betting tax would have been among the highest of any U.S. state.
Legal sports betting launched in Missouri on Dec. 1, 2025
Missouri is among the most recent states to launch legal and regulated sports betting. It began in the Show-Me State on December 1 of last year. Missouri offers access to both in-person and mobile sports betting.
In addition to setting one of the lowest tax rates in the U.S., Missouri made it even easier for sports betting sites to avoid paying taxes. The eight sportsbooks operating in the state are legally permitted to deduct promotional bonus bets offered to customers from their tax burden. That amounted to more than $1.2 billion in deductions from a state in which less than $1.2 billion in wagers have been placed since the launch of legal sports betting.
FanDuel and DraftKings, which together handle nearly 40% of all sports bets placed in Missouri, have used the promotional bet deduction clause to avoid paying any taxes since sports betting launched in the state. Sportsbooks are allowed to deduct an amount equal to as much as 25% of the total money wagered at the site.
Missouri collected $1.2 million in tax revenue in February, the most recent month for which data is available. Tax funds generated by Missouri sports betting are dedicated to the state’s school districts.
Missouri Rep. Knight is behind the proposed sports betting tax increase
It’s Missouri Rep. Jeff Knight who is the driving force behind this proposal to dramatically increase the tax on sports betting in the state. Knight introduced House Bill 3533 (HB 3533) in February, proposing the 24% uptick in taxation on sports betting adjusted revenue.
The new bill proposal would have significantly curtailed the amount of promotional bet tax write-offs available to the state’s eight sportsbooks. Under the terms of Knight’s bill, taxes would be applied before any deductions were permitted to be made by the sportsbooks.
Knight’s bill was referred to the Crime and Public Safety Committee at the beginning of this month. A public hearing was scheduled for Tuesday, but the bill was abruptly pulled from discussion before the hearing convened.
Here’s how Missouri’s tax rate compares to other neighboring states
At its current 10% rate, Missouri’s sports betting tax is one of the lowest in the U.S. legal and regulated market.
By comparison, nearby Iowa is even lower at a 6.75% rate. Kansas, like Missouri, taxes sports betting revenue at 10%. Arkansas is double that rate at 20%. And the highest among Missouri’s neighbors is Illinois at 50%.
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