$543M in Bets, $521K in Taxes: Missouri’s Promo Deductions Gut First Month
More than $500 million in bets flowed through Missouri’s new sportsbooks in December — yet the state collected just $521,000 in taxes.
Missouri’s first month of legal sports betting generated $54 million in wagers, according to figures released January 30 by the Missouri Gaming Commission, with online sportsbooks accounting for 99% of activity.
FanDuel led the market with 39.5% of the total online handle, followed closely by DraftKings at 36%. Bet365 unexpectedly ranked third with $57.7 million in handle, giving it a 10.7% share of the online market, among eight live sportsbooks.
BetMGM and Fanatics rounded out the top five. Circa Sports, which earned one of the two untethered licenses, handled just $1.4 million in bets.
Among retail sportsbooks, the Fanatics Sportsbook at Ameristar posted the largest handle, taking in $827,146.
The MGC broke the data down by sport for each sportsbook, an approach few other states use. Notably, 62% of FanDuel’s wagers were parlays. FanDuel posted a 36% hold on parlays, compared with 6.5% on standard football bets. The gap underscores how lucrative parlays are for operators.
Underwhelming Tax Intake Driven by Promotional Deductions
Despite the strong interest, Missouri collected just $521,200 in tax revenue. That figure falls well short of the $50 million projected for the first year, or about $4.2 million per month. The state directs this revenue toward public education and problem gambling treatment.
Promotional deductions were primarily responsible. Online sportsbooks issued $560.5 million in promotional credits and deductions while aggressively pursuing customer acquisition, thereby sharply reducing taxable revenue.
Commission Executive Director Mike Leara expects tax revenue to improve once the market moves past early startup costs. He told the Missouri Independent that the commission should have a clearer view of average monthly revenue within six months.
Leara also noted that the 10% tax rate is low. As voters approved sports betting through a constitutional amendment, the General Assembly can’t change the tax structure. Any adjustment would require another statewide vote.
Other States Moving Away From Deductions
Many states introduced promotional deductions at launch, then scaled them back. Colorado initially allowed unlimited deductions. Starting in January 2023, operators could deduct only 2.5% of free bets, with that cap declining to 1.75% in July 2026.
Arizona allowed deductions of up to 20% of promotional wagers during the first two years. The cap decreases gradually and disappears entirely in the sixth year. Other states, including New York, never allowed operators to deduct free bets from gross gaming revenue.
Ohio, however, is moving in the opposite direction. Lawmakers recently approved changes allowing sportsbooks to deduct promotional credits again after previously limiting them, signaling a more operator-friendly tax structure.
A Long Road to Legalization
Missouri legalized sports betting after voters narrowly approved the measure in November 2024, by fewer than 3,000 votes. Lawmakers had failed to pass legislation despite several attempts. This led to a petition campaign backed by the state’s professional sports teams, FanDuel, and DraftKings. Sportsbooks launched in the Show Me State on December 1.
Other states now appear ready to follow a similar path. In Nebraska, WarHorse Casino, working with the Sports Betting Alliance, is pushing to place an online sports betting question on the November ballot.
Missouri’s early results highlight a familiar trade-off. Promotional deductions can speed adoption and boost handle. Still, they also delay meaningful tax revenue in the early stages of a new market—a pattern likely to persist until bonus spending tapers.
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