FILE - Lottery Vending Kansas

Illuminated buttons show choices on a Missouri Lottery vending machine at Kansas City International Airport in Kansas City, Mo., Friday, March 24, 2017. Kansas lawmakers are looking to join other states, like Missouri, that allow sales of lottery tickets from vending machines.

(The Center Square) – Fiscal Year 2021, which ended June 30, was a record year for the Missouri Lottery with ticket sales up by nearly 20% and receipts topping $1.8 billion, netting $345 million for state education programs.

But if Missouri lawmakers allowed new products, such as sports wagering, and took steps to “modernize our channels of distribution” through online lottery ticket sales, revenues would dramatically increase – and quickly.

That was the pitch Wednesday by Missouri Lottery Executive Director May Reardon and Missouri Gaming Commission General; Counsel Edward Grewach before the Senate Economic Development Committee, who also called on lawmakers to crack down on unregulated gaming occurring on an estimated 15,000 “gray market” video game terminals across the state.

Reardon and Mayfield disagreed on one thing: Whether the lttery or the commission should administer the sports wagering program should lawmakers create one during their 2022 session, which begins Jan. 11.

Missouri allows bingo gaming, riverboat casinos and online gambling. Gaming taxes and fees are the state’s fifth-largest source of revenue, placing it ninth in the nation for gaming receipts, according to the Missouri Gaming Association (MGA), which notes Missouri’s 13 casinos employed almost 20,000 people who earned $884 million in 2018.

Casino operators are among those lobbying lawmakers to legalize sports gaming. Thirty-two states have done so since 2018’s U.S. Supreme Court ruling in Murphy v. National Collegiate Athletic Association, but efforts in Missouri have fallen short in consecutive sessions.

Senate Economic Development Committee chair Sen. Denny Hoskins, R-Warrensburg, has spearheaded the stunted efforts and has pledged to sponsor 2022 legislation to get it done. He withdrew a 2021 bill proposing legal sports gaming.

During FY21, Missouri’s casinos hosted 27.6 million visitors who lost $1.7 billion on slot machines and table games, a boost of about $370 million over FY20, when casinos were shuttered for more than two months by COVID-19 restrictions, according to the gaming commission.

More people visited Missouri casinos in pandemic-skewered FY20 than FY21 even though more was spent at casinos in FY21.

“It appears we have fewer people going to the casino but spending more money per patron than they did in prior years,” said Grewach, whose commission regulates casinos, but not the lottery.

Reardon called for authorizing online lottery ticket sales, noting nine states have done so. When Virginia authorized online lottery ticket sales, she said, the state recouped a $1 billion boost in sales over its first 14 months.

COVID-19 changed people’s gaming habits permanently, Reardon said. “If you don’t go to the grocery store anymore, you don’t run into our instant ticket vending,” she said. “We definitely need to modernize our channels of distribution.”

Reardon said the Missouri Lottery should administer any “new products” authorized by lawmakers, noting 70% of global online sports wagering is conducted by lotteries.

“Lotteries are very efficient in operating these products,” she said, noting 21.2 cents of every dollar generated by the lottery goes to education while – despite the 21% tax on revenues – only 1.99 cents of every dollar generated by casinos goes to education.

Grewach said if lawmakers allow sports betting, only wagers placed by a person physically present in the state to a company also residing in Missouri would be legal.

Any proposal to do so, he cautioned, would “create some regulatory challenges for us.”

Hoskins last year sponsored Senate Bill 98, which would have allowed the commission, not the lottery, to license casinos to offer sports wagering. According to its Fiscal Note, legal sports gaming would generate $200 million annually for education programs.

The bill targeted proliferating “gray market” machines by authorizing up to 10,000 of them in bars and truck stops, as well as fraternal/veterans’ organizations, with no location allowed to have more than five.