Vote-counting on Missouri’s Amendment 2 to legalize sports betting continued to go down to the wire the day after the election. With 98 percent of votes tallied, Amendment 2 held a 6,916-vote advantage out of nearly one million votes cast.
The ballot-question’s lead consistently narrowed throughout the late evening of Election Day and into the morning hours. It dwindled from a six-point gap to approximately 15,000 votes, then to half that number.
Nevertheless, with 50.1 percent of voters in support of Amendment 2, Wall Street analysts didn’t hesitate to treat legalized sports betting in Missouri as a fait accompli. Both James Wheatcroft and David Katz of Jefferies Equity Research weighed in, as did Deutsche Bank analyst Carlo Santarelli.
Wheatcroft called the apparent result a win for Flutter Entertainment (owner of FanDuel) and Entain, co-owner of BetMGM. He wrote that the plebiscite “breaks a fallow period in the regulation process for operators.” Wheatcroft believed Missouri would go live before December 2025.
“We anticipate further political progress around online legalization for both sports and iGaming as states seek incremental tax dollars,” the analyst wrote of the long-term ramifications. Other positives he noted were a low tax rate of 10 percent, much lower than neighboring Illinois’, and a sports-engaged populace.
Given Missouri’s population represents 1.8 percent of the total United States, legitimization of sports betting there would mean over 50 percent of the U.S. populace has access to sports wagering. Wheatcroft observed that Maryland, with a similar population, engendered $500 million in gross gaming revenue in 2023.
Regarding taxation, Missouri’s rate does not include promotional deductions, effectively bringing it into the single digits, Wheatcroft explained. “This comes after widespread investor concern around higher tax contagion from neighboring Illinois,” where tax rates on sports betting revenue top out at 40 percent.
Santarelli focused on Amendment 2 proponent DraftKings. (FanDuel also supported the measure; Caesars Entertainment did not.) He wrote, “Given the incredibly favorable tax structure and despite the relatively limited expansion of the population base that has access to mobile sports betting (+3.7%), we view the passage as favorable for [DraftKings] and other mobile sports betting providers.”
Although Amendment 2 allows for as many as 22 sports betting licenses, Santarelli predicted the eventual number will be much smaller. Likening Missouri’s potential tax levy to Michigan’s five percent, he cited Show Me State studies that pegged the annual impost at $134 million. That broke down to $536 million per year in gross revenue or $119 per year in betting per Missourian. Skeptically, Santarelli called this “a healthy premium to most states not named New York or New Jersey. As such, we view the tax projections as likely to disappoint.”
He took a more conservative view, prognosticating $82 per year in betting per citizen and $370 million in revenue. Santarelli allowed that the latter number could escalate under heavy promotional activity. His net-revenue projection was $192 million a year.
Again citing Michigan, the Deutsche Bank analyst forecast a “very aggressive” promotional climate, with perhaps as much as 48 percent of revenue being returned to bettors in free play and its ilk. He also foresaw some DraftKings cannibalization in the St. Louis and Kansas City markets, both of which the company currently draws from, “though we don’t expect this to be significant.”
Citing outdated vote totals (55 percent support), Katz predicted Missouri would commence sports betting on December 5, 2025. His opinion was that it’s an incremental positive for both Flutter and DraftKings.
Katz continued that it was unclear whether ESPN Bet or BetRivers would partake of Missouri, given their respective strategies. He divided the market between FanDuel ($200 million to $240 million in yearly revenue) and DraftKings ($140 million to $175 million).
“Regarding CZR, which operates multiple properties in MO and was not supportive of the direct operator licensing aspect, we believe the outcome is a modest positive,” Katz chronicled, “as it is for other land-based operators with land-based presence and therefore a customer database in the market.”
The Jefferies analyst then turned to Petersburg, Virginia, where a Cordish Gaming casino had been approved with 82 percent of the vote in favor. The permanent facility is projected to house 1,600 slot machines, 61 table games, and 200 hotel rooms.
Katz noted that most Virginia casinos are over an hour’s drive from Petersburg. One only 25 miles distant is Rosie’s Emporium in Richmond. It generates annual revenue of $526 million, the most of any Churchill Downs casino in the Cavalier State.
The analyst saw Petersburg competition as a potential negative for Rosie’s Emporium. He concluded, “While the increasing competition among full casinos across the state is a noteworthy positive for [Boyd Gaming] … and CZR (full casino opening in Danville), we believe CHDN is positioned to generate strong returns from its [historical horse racing] portfolio in total across the state.”
