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Sept. 19, 2024 |  By: Rudi Keller - Missouri Independent

Missouri initiative campaigns launch TV spending after surviving court challenges

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By Rudi Keller - Missouri Independent

Missouri’s November ballot is now set, and initiative campaigns are ramping up spending to convince voters to pass the proposals.

The first to go on the air last week was Winning for Missouri Education, the committee funded by online sports gambling companies for Amendment 2, which would legalize betting on college and professional games.

The committee spent $1.2 million for ads in every media market except north-central and northeast Missouri and another $4.7 million reserving air time through the Nov. 5 election.

Two other initiative campaigns — Amendment 3, which would restore abortion rights, and for Proposition A, to boost the minimum wage and require businesses to provide paid sick and family leave —  are making major ad buys for October. Ads to promote passage Amendment 3 will also begin this week in several markets.

Opposition groups are forming to counter those campaigns, but only a group opposing sports wagering, Missourians Against the Deceptive Online Gambling Amendment, has bought air time. The group, which formed on Tuesday, on Friday reported $4.1 million in contributions from Missouri casinos to the Missouri Ethics Commission. The group spent $546,805 last week for ads that will run this month in Springfield, St. Louis, Columbia and Kansas City.

Missourians for Constitutional Freedom, the committee campaigning for Amendment 3, has spent $3.9 million to purchase ads that will run continuously statewide starting with the week of Oct. 8. The ads that begin this week will run in the St. Louis and Springfield markets.

Missourians for Healthy Families and Fair Wages, the committee backing Proposition A, has spent $1.3 million for ads that will begin the week of Oct. 15.

The Independent tracks ad spending by reviewing documents broadcasters must file daily with the Federal Communications Commission. Those totals do not include spending for streaming platforms. 

In the six statewide races, only U.S. Senate candidates Lucas Kunce, the Democratic candidate, and Josh Hawley, the Republican incumbent, have begun television campaigns.

Hawley, Kunce and a PAC supporting Hawley have spent $7.8 million on television since the start of August. Ballot measure spending so far totals $11.6 million.

The outlays to reserve time late in the election are standard strategies, Republican political consultant John Hancock said Thursday.

“You reserve from the back forward,” Hancock said. “You want to make sure you’re up as people are making decisions. It’s entirely possible that those campaigns will buy additional weeks as budgets permit.”

Hancock is working for the Osage River Gaming and Convention Committee, which is backing Amendment 5 on the ballot. The measure, which would authorize a new casino near the popular Lake of the Ozarks tourist area, is the only initiative campaign that has not followed up certification for the ballot with TV ad purchases. Hancock declined to discuss the timeline for doing so.

But after spending $4.3 million so far — all provided by Bally’s, which currently operates a casino in Kansas City, and RIS Inc., a major regional developer near the Lake of the Ozarks — a large outlay for advertising to support Amendment 5 is certain, said Jonathan Ratliff, a Republican consultant who is not currently working on any ballot measure campaigns.

“My rule always when you’re putting these together is if you’re not willing to spend the last million, you shouldn’t pay for the first million,” Ratliff said.

The sports wagering amendment, which survived a court challenge questioning whether it received enough signatures, is using the promise of more money for education in its first ad. Ads from the opposition group, Missourians Against the Deceptive Online Gambling Amendment, argue that promise won’t be kept.

The ad now running for the sports wagering initiative features a former teacher and promises it “will raise tens of millions of dollars every year for our classrooms, helping increase teacher pay.”

The fiscal note summary voters will see on the ballot estimates it will bring in $11.75 million in licensing fees, money that would cover the cost of administering the licensing process. Any extra in that fund goes to support veterans programs, including veterans nursing homes.

The net winnings from wagers would be taxed at 10%, which the fiscal summary estimates to be in a range of no new money up to $28.9 million annually. The tax would be applied after gambling companies deduct promotional costs like free wagers for new accounts.

A similar tax structure in Kansas has generated $18.2 million in revenue on $4.1 billion wagered since sports betting became legal in that state in September 2022.

“In reality, Amendment 2 contains no guarantees that a single penny will go to our schools,” Brooke Foster, spokeswoman for the anti-sports wagering committee, said in a news release.

Under the Missouri Constitution, all taxes on casino gambling and the state’s share of lottery ticket sales must be spent on education programs. In the fiscal year that ended June 30, the 21% tax on money won by casinos brought in $357.6 million and the lottery produced $388.8 million.

Lawmakers appropriated $8.7 billion from all funds for the Department of Elementary and Secondary Education and $1.4 billion for the Department of Higher Education.

There is nothing in the amendment that prevents lawmakers from reducing current spending by the amount of new revenue produced by sports wagering.

The sports wagering amendment will keep its promise to bring in tens of millions each year, spokesman Jack Cardetti said. There is little likelihood lawmakers will reduce current spending on education, he contends.

The new revenue could be a significant part of the $100 million needed as supplemental spending for public schools in the current fiscal year, Cardetti said.

Winning for Missouri Education spent $6 million for the signature campaign to get on the ballot, all from the two major online sports betting platforms, DraftKings and FanDuel and their parent companies. 

The $3.52 million contribution from DK Crown Holdings on Aug. 15 is the largest political donation in Missouri this year. BetFair Interactive, owner of FanDuel, added $1.5 million on Thursday.

The ads will run in every market in the state, Cardetti said.

“We’re going to be making sure that Missourians in every corner of the state know how important it is that Missouri doesn’t have sports betting,” he said. “As we sit here today, seven of our eight neighboring states have legalized sports betting, and those dollars are making improvements in those states. Missourians are missing out.

Changes to voting laws are pushing campaigns to spend money earlier, Hancock said. No-excuse absentee voting begins Oct. 22.

“I no longer think it makes practical sense to buy the last two weeks only,” he said. “You’ve got to have at least three.”

Ballot measure campaigns have two goals with their spending plans, Ratliff said. The first is to give an impression of invincibility with heavy rotations for their ads. The idea is to scare off  opposition campaigns.

Ballot measures are easier to defeat than to pass, Ratliff said.

“If any of these groups have any opposition, it makes it a lot harder for them to be successful, especially something like the casino and sports betting stuff,” Ratliff said. “If they don’t have opposition, they have a much, much better chance of passing. Even the slimmest amount of opposition could really knock those back and keep them from passing.”

The key for the ad campaigns, of course, is to get the message seen. And the success of the Kansas City Chiefs is making their game broadcasts some of the most costly any campaign can buy.

Hawley spent $75,000 to run one 30-second spot on KSHB in Kansas City during the Chiefs’ opening game. Missourians for Constitutional Freedom spent $50,000 to reserve two ads during the Oct. 27 game against the Las Vegas Raiders on KMOV in St. Louis.

And it cost Winning for Missouri Education $30,000 for two ads on KJFX in Joplin during the Oct. 20 game against the San Francisco 49ers, the team the Chiefs defeated in this year’s Super Bowl.

Streaming services, cable channels and digital recording mean many viewers are choosing their own schedule for television viewing. But audiences still tune in to live sporting events, Ratliff said.

“They’re gonna watch that live, so they’re worth a lot more,” he said. “Those ads are crazy expensive, and you’re going to see those ads are more valuable because you’re gonna have eyes on it.”