Missouri lawmakers removed the proposed sports betting tax increase from HB 3533 at a Crime and Public Safety Committee hearing on April 28, 2026. The original bill, sponsored by Rep. Jeff Knight (R-Camden County), would have raised Missouri’s sports betting tax from 10% to 34% and capped the promotional deductions that have kept state tax receipts low.
Committee Chairman Jeff Myers told the hearing that the sports betting tax increase “has been taken out of this,” according to reporting from US iGaming Hub. The decision came after testimony from the Missouri Gaming Association.
What the bill would have done
HB 3533 originally proposed two major changes to Missouri’s sports betting framework:
- Raise the tax rate on operator adjusted gross revenue from 10% to 34% — moving Missouri from one of the country’s lowest sports betting tax rates to one of the highest.
- Cap promotional deductions that operators currently use to lower their taxable revenue. Through Missouri’s first four months, these deductions kept state tax collections to roughly $3.6 million on $1.5 billion in handle.
Why it was dropped
The Missouri Gaming Association argued during the April 28 hearing that altering the 10% tax rate through legislation would be legally problematic, since the rate was specified in the constitutional amendment voters approved in November 2024. The Gaming Association’s position was that any tax-rate change would require returning to voters.
That argument appears to have prevailed in the committee. While the bill itself remains active for other casino-related provisions, the sports betting tax hike was struck before further committee action.
What’s left of HB 3533
According to Bettors Insider, the bill’s remaining provisions still address casino tax rates and other gambling-related policy areas. The sports betting deduction cap appears to have been removed alongside the tax rate hike, but the legislative status of all components is subject to further committee revision.
Future tax conversations
The conversation isn’t necessarily over. The April 28 hearing referenced ongoing discussions about removing Missouri’s state income tax — a move that, if it advances, could reignite interest in raising other state revenue sources, including the sports betting rate. Industry observers expect at least one more legislative attempt to revisit the 10% rate or the promotional deduction structure within the 2026 session.
For Missouri bettors, the immediate practical effect of dropping the tax hike is no change — the 10% operator tax remains, and operator promotional spending continues without legislative caps. Welcome bonuses, odds boosts, and parlay insurance remain at the levels operators set on their own.
Background: why state revenue has lagged
Through the first four months of legal Missouri sports betting:
- $1.5 billion in handle
- 63+ million individual bets
- Roughly $3.6 million in state tax revenue
The shortfall versus projections is driven by the constitutional amendment’s allowance for operators to deduct promotional spending from taxable revenue. Missouri Independent reported that operators wrote off more than $125 million in free bets in December 2025 alone — wiping out most of the would-be tax base for that month.
For more on Missouri’s sports betting framework, see our Missouri laws guide and our Amendment 2 explainer.