Missouri Schools Not Seeing Promised Budget Boost From Sports Betting Revenue

Nearly two years after Missouri voters approved legal sports betting with campaign promises of a windfall for public education, school districts across the state say they are not seeing any meaningful budget increase from the new revenue stream.

Missouri legalized sports wagering in November 2024 through Amendment 2, a ballot measure backed by millions of dollars in campaign spending from DraftKings and FanDuel under the banner “Winning for Missouri Education.” That campaign leaned heavily on the promise of new money for the state’s Department of Elementary and Secondary Education. Regulators set a launch date of December 1, 2025, and eight Missouri sportsbooks — including DraftKings, FanDuel, BetMGM, Caesars, bet365, Fanatics, Circa Sports, and theScore Bet — began taking legal wagers statewide.

The Numbers Behind the Shortfall

The Missouri Gaming Commission had initially projected more than $6 million in education revenue during the first year of legal betting, with that figure expected to climb toward roughly $20 million annually in the years that followed. The reality has fallen well short of that early estimate. According to the Missouri Gaming Commission, just $3.213 million was transferred into the Missouri Education Fund during fiscal year 2026, the first year sports betting was live in the state. A first payment of $1.084 million went out on June 9, followed by an additional $2.129 million later in the summer.

Under the Missouri Constitution, sportsbook operators are required to pay a 10% tax on their monthly gross gaming revenue, with that money directed toward education. However, operators are permitted to deduct expenses such as player winnings, promotional wagers, and federal taxes before the tax is calculated — a structure that has consistently limited the taxable base and, by extension, how much money actually reaches the education fund.

Why Schools Won’t Feel a Difference

Even the money that has come in is not translating into new spending at the district level. House Bill 2, Missouri’s state appropriations bill, includes $6.805 million from the Sports Wagering for Education Fund earmarked for the state’s foundation formula, which distributes funding to school districts, along with smaller allocations for career-readiness assessments and an online parent portal. But because the foundation formula appropriation for fiscal year 2027 matches the amount set for fiscal year 2026, the sports betting dollars are simply replacing money that would have come from elsewhere in the state budget rather than adding to the total schools receive.

School officials say the funding is difficult to track once it arrives. Districts typically see gaming revenue folded into the Classroom Trust Fund line on their monthly payment statements from DESE, alongside other existing revenue streams like the Basic Formula and Proposition C funds, rather than appearing as a distinct new source of money. As of mid-August, at least one Mid-Missouri district told local reporters it had not received any direct payments tied specifically to the Missouri Education Fund.

The gap between the original sales pitch and the on-the-ground reality echoes concerns raised by critics well before the state’s first tax dollars ever arrived. The ballot language behind Amendment 2 explicitly allowed for the possibility that no money would reach schools at all if taxable revenue came in too low, given the deductions operators are permitted to take. With betting handle fluctuating month to month — Missouri sportsbooks took in more than $385 million in wagers in January before dropping to $277 million in February, for example — the taxable revenue funding education has remained a modest, inconsistent line item rather than the steady windfall voters were promised.

What Comes Next

For now, Missouri’s experience mirrors a pattern seen in several other states that legalized sports betting on the promise of education funding: the tax revenue exists, but it rarely amounts to a transformative sum once measured against multibillion-dollar state education budgets. Missouri’s foundation formula alone is funded in the billions of dollars, making the sports betting contribution a small fraction of the total even in a strong month. Unless lawmakers change how the money is appropriated — directing it as new spending on top of existing formula funding rather than folding it into the same pot — Missouri schools are unlikely to see the kind of budget boost that helped sell the amendment to voters in the first place.