Amendment 2, Missouri sports betting legalization, would bring more harm than good | Opinion
On Election Day, Missourians will decide on a state constitutional amendment legalizing sports betting. If Amendment 2 passes, Missouri would be the 39th state to legalize sports betting. And if experience and recent research are any indication, it would cause more harm than good.
The amendment restricts advertising to minors and requires criminal background checks for gaming operators. Companies will have to provide information on gambling addiction, such as those rapid-fire disclosures at the end of gambling app ads. Also, we’re told that gambling proceeds would be directed toward education. Supporters of a yes vote claim that tax revenue may be as high as $38.7 million by the end of the fifth year.
But at what cost?
Charles Fain Lehman of the conservative Manhattan Institute for Policy Research recently provided a litany of studies detailing the wreckage that sports gambling has wrought. He writes, “Six years into the experiment, the evidence is convincing: Legalizing sports gambling was a huge mistake.”
‘Decreased consumer financial health’
A July 2024 paper by Brett Hollenbeck at the University of California, Los Angeles, concludes, “legalization of sports gambling decreased consumer financial health” with effects that are, “particularly pronounced when states legalize online betting.” Specifically, researchers found that “three to four years after the legalization of online sports gambling, we observe that the likelihood of bankruptcy filing increases by as much as 25-30% when compared to pre-treatment levels.”
Another paper published in July 2024 by researchers, including two from the University of Kansas, found that legalization dramatically increases the amount of sports betting, and the additional gambling “does not displace other gambling activity or consumption but significantly reduces households’ savings allocations.”
Perhaps most concerning is that those most likely to gamble are already the poorest among us. A 2021 study published in the European Journal of Public Health concludes, “even in government organized system(s) where gambling profits are used for common good, profits come from the most socially disadvantaged people thereby exacerbating inequality.”
Lawmaker tricks with school funding formula
The benefit, we are told, is that tax revenue from sports gambling would go directly to schools. We’ve heard this before. As it stands, all state revenue from casino gambling and the lottery must go to education as well. But like a bucket with a hole in the bottom, just because you’re pouring in more money, that doesn’t mean the bucket ever gets full. State legislators just reduce current education spending levels and, as long as they meet the requirements of the state funding formula, all is well.
Opponents to the measure argue that, as written, there is no guarantee that Missouri would see any financial benefit. They point to the fiscal note, which reads, “It appears these retail license fees will not generate any revenue to the state.” In Kansas, despite the $194 million gambled over last year’s Super Bowl, the state earned only $1,100.
Missouri state Sen. Denny Hoskins has made the same point about the projected revenue: “The tax rate is very low. The fees are very low. There’s not enough money in there for problem compulsive gambling, which is going to be caused by legalization of sports betting here in the state.”
Corporations such as FanDuel and DraftKings, which are bankrolling the effort, would profit handsomely if the amendment passes. So too would the professional sports teams supporting the measure: the Chiefs, Royals, Cardinals and Blues. According to a 2018 fact sheet released by the American Gaming Association, the NFL alone stands to make $2.3 billion each year from legal sports betting.
Research tells us that passage of Amendment 2 would have calamitous impacts on Missourians, especially for those with already limited means. We would gamble more and save less. Bankruptcies will increase. Gambling disorders would increase. And education funding would remain the same.
Missourians spend a lot of time arguing how to help those in need. What’s before us now is an opportunity to avoid putting more of our neighbors in need in the first place.
Patrick Tuohey is co-founder of Better Cities Project, a 501(c)(3) nonprofit focused on municipal policy solutions.