The Gaming Revenue Gap: Why a Dedicated Education Fund Falls Short in Missouri

Missouri has one funding source explicitly earmarked for public education: casino gaming tax revenue. Unlike most school funding, gaming revenue is distributed through a statewide education fund separate from local property values and district enrollment. Gaming revenue has been essentially flat in nominal dollars for more than a decade, leaving it to shrink in real terms as other funding pressures grow.

Gaming revenue is visible because it is dedicated. It is also small. In FY2025, Missouri casinos contributed $361.6 million to the state's Gaming Proceeds for Education Fund. Missouri's total annual K-12 spending is roughly $12 billion, which means casino gaming revenue accounts for about 3% of the overall public school funding picture.

Missouri's casino tax structure is straightforward. Under state law, casinos pay a 21% tax on adjusted gross receipts, defined as wagers minus winnings paid. Ten percent of those tax collections goes to the casino's home dock city or county. The remaining 90% goes into the Gaming Proceeds for Education Fund.

That structure gives the Education Fund a fixed share of casino gaming activity. It does not give the fund automatic growth. If casino adjusted gross receipts stay flat, the education transfer stays flat. If adjusted gross receipts grow more slowly than inflation, the Education Fund loses purchasing power even if the dollar amount looks stable.

That is what has happened. Missouri Gaming Commission data show that casino gaming revenue sent to education has hovered near the same level in recent years.

The fund received $341.4 million in FY2011 and $361.6 million in FY2025, an increase of only about $20 million over 14 years.

The FY2025 Gaming Commission report shows gross revenue, or total wagers, above $11 billion, while adjusted gross revenue remained under $2 billion. Over the past decade, Missouri's casinos have produced a relatively steady tax base, with little sign of fast real growth. Flat in nominal terms means shrinking in real terms.

Although the amount transferred to education increased slightly over the years, that increase doesn't account for inflation. After adjusting for inflation, the value of the Education Fund has actually declined over time.

If Missouri's FY2011 gaming revenue for education, $341.4 million, had simply kept pace with inflation, it would equal roughly $488.1 million in FY2025 dollars. Actual FY2025 revenue was $361.6 million. The difference is about $126.4 million.

That inflation-adjusted gap is:

Gaming revenue has contributed more than $8.4 billion to Missouri education since the casino gaming tax began. The fund sends a fixed share of casino adjusted gross receipts to education, but the underlying casino tax base has not grown fast enough to preserve the fund's purchasing power. As a result, Missouri's Education Fund receives roughly the same number of dollars while those dollars buy less each year.

The issue extends well beyond gaming revenue alone. But the gaming gap shows how a funding source can remain stable on paper while falling behind in practice. For Missouri schools, the question is where education money comes from, and whether the revenue streams already dedicated to education can still do the job they were created to do.