Missouri Casino Tax Hike Bill Could Cost Industry $500M

Missouri lawmakers are debating a significant casino tax overhaul that could reshape how the state earns revenue from gambling. House Bill 3533, sponsored by Rep. Jeff Knight (R-Lebanon), targets both the state’s 13 land-based casinos and its recently launched sports betting market. The bill is moving against the backdrop of a broader push to phase out Missouri’s income tax entirely, and the pressure to find replacement revenue is driving much of the conversation.

A Fee Frozen Since 1994 Gets Revisited

The most immediate change in HB 3533 involves the casino admission fee, a charge that has sat at $2 since casino gambling arrived in Missouri in 1994. The bill would raise it to $5.50 and require casinos to pay it every two hours rather than once per visit. It would then be adjusted annually for inflation going forward.

Casinos pay the admission fee on behalf of customers, so the burden falls on operators rather than players directly. Rep. Barry Hovis (R-Whitewater) noted that the current $2 fee, adjusted for inflation, would already be worth around $4.31 today. Rep. Tim Taylor (R-Bunceton) reinforced the case for action.

“Revenue from lottery and from casinos has all been down,” Taylor said. “This is the original fee from way back when, so we haven’t addressed it in a long time.”

The bill would also direct $15 million in net proceeds from the gaming commission fund to the Department of Natural Resources Historic Preservation Revolving Fund.

New Taxes Proposed for Casinos and Sports Betting

Beyond the admission fee, HB 3533 would impose an additional 13% tax on casino gambling receipts and a 24% additional tax on sports wagering receipts, both on top of existing obligations. A new 1.5% remote wagering access fee would also apply to online and remote bets. The first $35 million collected from that fee would go to the same historic preservation fund.

The sports betting provisions carry particular weight. Missouri’s market only launched on December 1, 2025, and the early numbers have raised questions about how much revenue the state is actually capturing. Operators handled close to $1 billion in wagers during the first two months, but the state collected less than $700,000 in tax revenue during that period. Promotional deductions have significantly reduced the taxable base, and the current sports betting tax rate stands at 10%.

HB 3533 would change that by applying the tax before the promotional deductions apply. Knight has said the bill could generate an estimated $470 million in new revenue, though the industry disputes that figure sharply.

Industry Pushes Back Hard

The Missouri Gaming Association has come out firmly against the bill. Mike Winter, a lobbyist for the group, argued that the combined impact could cost casinos more than $500 million. He also pointed to competitive pressure from slot machines operating in Missouri convenience stores and gas stations as a factor that already squeezes licensed casino revenue.

“We came into Missouri when we built our facilities looking for a stable gambling market,” Winter said. “When you have bills like this, there may be more favorable markets out there than what this bill would allow Missouri to be.”

A separate legal concern has also surfaced. Missouri voters approved sports betting through a constitutional amendment, and Winter questioned whether standard legislation can modify the tax structure that voters directly authorized. Committee chair Rep. Jeff Myers (R-Warrenton) acknowledged the issue but said it would be addressed separately.

The Missouri Chamber of Commerce and Industry also testified against the bill. Chance Hepola, the group’s director of government affairs, urged caution about singling out specific industries for higher taxes. “We want to be mindful of picking winners and losers when it comes to certain things that are funding specific projects,” he said.

The Bigger Picture: Replacing Income Tax Revenue

The Missouri casino tax debate does not exist in isolation. Lawmakers are simultaneously advancing a constitutional amendment that could put income tax elimination before voters later this year. Income tax accounts for a major portion of Missouri’s general revenue, and any phaseout would leave a gap potentially running into the billions.

Rep. Hovis connected the casino fee discussion directly to that challenge.

“We’re looking to get rid of the income tax and shift to a fee-based structure,” he said. “How do we make up those differences when they start looking at making sure that we’re keeping up our fees?”

HB 3533 has cleared committee attention but has not advanced to a full House vote. The legislative session is approaching its deadline. Even if the bill stalls this session, the pressure to find new revenue sources is not going away, and gambling will remain part of that conversation as long as income tax reform stays on the table.