It appears "The Show-Me State" wants to show the rest of the world an alternative to income tax.
As Missouri considers reducing its reliance on income tax, a state House committee is looking at ways to increase revenue from casinos. They are considering adding new taxes and raising entry fees for casino visitors.
House Bill 3533 (HB 3533) is a 2026 Missouri bill sponsored by Rep. Jeff Knight (R-Lebanon) designed to boost state revenue from the state's 13 casinos and sports betting operations. It proposes raising long-standing fees and adding new taxes.
This comes at a time when lawmakers are also considering making casinos smoke-free.
What Are the Key Provisions of HB 3533?
This bill is part of broader discussions in Missouri about reducing or phasing out the state income tax, which is a major source of revenue. If the income tax is reduced, alternative sources of money will be needed, such as:
Admission Fees: HB 3533 proposes raising the per-person admission fee paid by casino operators to the state from $2 (unchanged since 1994) to $5.50. This fee would be charged every two hours someone spends in the gambling area. Starting in fiscal year 2027, the Missouri Gaming Commission would adjust this fee each year for inflation based on the Consumer Price Index (CPI) for the Midwest Region, and this would continue for at least 10 years.
The money from these fees would go to the Gaming Commission Fund to cover regulatory costs, with portions going to the Department of Natural Resources Historic Preservation Revolving Fund (up to $35 million), veterans' programs, developmental disabilities services, and other state and community funds. Traditionally, half went to "home dock" cities/counties.
Remote Wagering Access Fee: For online or remote sports betting via casino licensees, a new monthly fee of 1.5% of total wagers (handle) would replace the traditional admission fee. The proceeds would go to the Gaming Commission Fund, with priority given to projects like historic preservation.
New/Additional Taxes on Receipts:
- A 13% additional tax on adjusted gross receipts (AGR) from certain casino gambling games.
- A 24% additional tax on adjusted gross receipts from sports betting.
These new taxes would be in addition to existing ones. Currently, casinos face about a 21% tax on AGR, split between the state and home-dock communities. Sports betting, legalized by a 2024 voter amendment and started in December 2025, has a 10% tax on net revenue/AGR. Some analysts think the tax changes could significantly raise the effective total tax rate, potentially reaching 34%, depending on interpretations and limits on promotional deductions.
The bill also clarifies how funds flow through the Gaming Commission to the Department of Revenue and specifies distribution methods.
What is the Motivation Behind Missouri's Casino Tax Bill?
Gaming revenue currently supports education, veterans' programs, historic preservation, local communities, and other priorities. However, recent shortfalls in lottery and casino projections have increased financial pressure.
The $2 admission fee and core casino tax structure have remained unchanged since Missouri's riverboat casinos began in 1994. Proponents see this bill as a way to adjust for inflation and modern gaming, including online sports betting.
Sports Betting Reality: Missouri's sports betting started with high initial betting amounts (e.g., over $540 million in the first month) but very low initial tax revenue ($521K in December 2025, dropping further in January 2026). This drop was mainly due to generous promotional deductions (free bets, bonuses) lowering taxable AGR, plus the relatively low 10% tax rate. The bill aims to address this revenue gap.
Revenue Needs: In 2025, Missouri casinos generated nearly $2 billion in gaming revenue. While gaming taxes support education (a constitutional priority), revenue projections have sometimes fallen short, adding to budget pressures, especially with potential income tax cuts on the horizon.
What is the Current Status of HB 3533?
The bill was scheduled for a public hearing in a House committee but was pulled and not fully heard, and it has not advanced to a committee vote. With the legislative session winding down, it has stalled for now. However, similar ideas could return in future sessions, especially if income tax reduction efforts continue or sports betting revenue stays low.
Potential Impacts:
On Casinos/Sportsbooks: Higher costs could reduce profitability, affect the customer experience if operators pass on fees, or slow industry growth and expansion. Missouri casinos already face a relatively high tax burden compared to some states. Industry groups and the Missouri Chamber of Commerce have opposed fee and tax hikes.
On Patrons: The bi-hourly $5.50 fee (compared to the old flat $2 fee) could significantly raise costs for longer visits. Casinos might absorb some charges or pass them on to patrons.
On State Revenue: Fiscal notes projected significant new income from admission fees (assuming about 28 million admissions) and the new taxes, with inflation adjustments ensuring future growth. A portion is earmarked for historic preservation and other specific funds. However, overly aggressive taxation could reduce activity, similar to the "Laffer curve" effect in gaming.
This bill reflects a common state strategy of moving from broad-based income taxes to "sin" or voluntary taxes on gambling, alcohol, tobacco, etc. Critics worry that this could make the state budget too reliant on volatile gaming revenue.
HB 3533 would modernize and expand Missouri's revenue from its established casino industry and the new sports betting market without broadly increasing income or sales taxes. Presently, it is in the early legislative stages and faces opposition, leaving its future uncertain.
