Missouri schools not expecting budget boost despite sports betting revenue

By: Mitchell Kaminski

COLUMBIA, Mo. (KMIZ) -- When Missouri voters approved legal sportsbetting in November 2024, Winning for Missouri Education, backed by millions of dollars from DraftKings and FanDuel, touted millions in new revenue for the Department of Elementary and Secondary Education.

The Missouri Gaming Commission initially estimated the state would collect more than $6 million in its first year of legalized sports betting for education, with that figure expected to climb to about $20 million annually throughout the following four years.

However, despite $3.213 million being transferred into the Missouri Education Fund during fiscal year 2026 -- the first year of legalized sports betting -- school districts say they do not expect to see an increase in their budgets as a result.

After $1.084 million was transferred to the Sports Wagering Education Fund on June 9, ABC 17 News reached out to several Mid-Missouri school districts to find out when they expected to receive the funding.

As of Aug. 13, a spokesperson for Southern Boone County R-I School District told ABC 17 News the district had not received any payments from the Missouri Education Fund.

Under the Missouri Constitution, sports betting operators are required to pay 10% of their monthly gross gaming revenue to the state for education. However, sportsbooks can deduct certain expenses, including player winnings, promotional wagers and federal taxes, before that tax is calculated.

In June alone, sportsbooks deducted $244.5 million for those expenses. But those deductions are not the primary reason school districts are not expecting to see additional funding.

According to DESE Chief Communications Officer Lucas Bond, lawmakers have already designated how sports wagering revenue will be used in the state's budget.

House Bill 2, the state's appropriations bill, includes $6.805 million from the Sports Wagering for Education Fund for the foundation formula, which provides funding to school districts. It also includes $1.2 million for career-readiness assessments and $400,000 to establish an online parent portal.

Bond said if sports wagering revenue continues to come into the state as projected, those appropriations will be funded. However, the money going toward the foundation formula will not result in a net increase for schools.

"It should be noted that the Sports Wagering Fund dollars appropriated to the foundation formula would be part of the regular distribution," Bond said. "Since the foundation formula appropriation for FY27 is the same as for FY26, this would not represent a net increase in foundation formula money to schools."

In other words, sports betting revenue can help fund existing education appropriations without necessarily increasing the total amount of money schools receive.

Columbia Public Schools Chief Financial Officer Heather McArthur said districts also do not receive a breakdown showing exactly where each dollar in their state payment originates.

"When districts receive the monthly payment from DESE, it just lists the various revenues (Basic Formula, Classroom Trust Fund, Proposition C, Transportation, etc.) on the payment transmittal," McArthur told ABC 17 News in an email.

McArthur said gaming revenue earmarked for education is generally included in the Classroom Trust Fund line on district payment statements. However, those funds are currently being distributed based on the state's original budget appropriation.

She said that could change later in the fiscal year as the state gets a clearer picture of total revenue and DESE makes additional distributions or withholdings.

The distinction is important because the campaign supporting the passed amendment repeatedly highlighted education as a major beneficiary of legalized sports betting.

The amendment's passage did create a new source of state revenue dedicated to education, but the amount ultimately reaching schools and whether it represents additional funding depends on how lawmakers appropriate that money through the state budget.

For fiscal year 2027, at least some of that sports wagering revenue is already accounted for in existing appropriations rather than being added on top of the state's foundation formula funding.

As a result, Missouri schools are not expecting to see a budget windfall simply because sports betting revenue is now flowing into the state's education funds.