Mississippi tries yet again to legalize online sports betting

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Lawmakers are attempting for the fifth time to push a bill through that would allow online sports betting in Mississippi

House Bill 606 has been sponsored by Representative Eure and seeks amendments to Section 97-33-1, Mississippi Code of 1972. It seeks to ‘legalize online betting, gaming and wagering on sporting events, athletic events and events authorized by the Mississippi Gaming Commission under certain conditions;’. 

It continues: “…to bring forward sections 75-76-5, 75-76-33, 75-76-55, 75-76-79, 75-76-89, 75-76-101, 75-76-175, 75-76-177 and 97-33-305, Mississippi Code of 1972, for purposes of possible amendment; to amend sections 97-33-8, 97-33-17, 97-33-25 and 97-33-27, Mississippi Code of 1972, to revise gaming prohibitions to provide an exception for online betting, gaming and wagering, and for related purposes.’ 

The proposed rules include certain caveats, notably: 

  • (ii) Is limited to a single Internet platform per gaming license;
  • (iii) Requires a participant of an Internet platform to register in-person at its affiliated licensed gaming establishment at least once every (12) months;

What are the current rules?

Currently Mississippi permits commercial casinos, racinos, tribal casinos, landbased sports betting and lottery. When a bettor is on-site at a commercial casino, they are able to wager using mobile, however they must be on-site. 

Mississippi is home to 26 commercial casino properties, of which 6 are brick and mortar casinos and 20 properties are riverboat casinos. There are 3 tribal casinos in the state which operate outside of the commercial regulator’s scope. 

How is sports betting taxed?

Current legislation in Mississippi stipulates sports betting is taxed at the same state and local rates as revenue from traditional casino games. Casinos pay a 4% tax on GGR that falls below $50,000 per month, 6% on revenue between $50,000 and $134,000 per month and 8% on gaming revenue exceeding $134,000. Additionally, each Mississippi municipality that welcomes a commercial casino property charges an annual license fee at approximately 3-4% of GGR. Sportsbook operations are, of course, also subject to a 0.25% federal excise tax which is applied to wagering handle. 

Furthermore, there are no restrictions on wagering on collegiate sports unlike neighbouring state Tennessee where no player prop bets on collegiate athletes are allowed. 

Part of the reason as to why lawmakers are reluctant to introduce statewide mobile or online sports betting is the belief that the 26 commercial casino properties attract a substantial amount of tourism and local visits. By allowing sports betting statewide on mobile, those in opposition to House Bill 606 argue that it would damage commercial casino revenue with no palpable benefit to the state overall.

Prior to Representative Eure’s renewed effort, several bills to legalize online sports betting failed to gain traction in 2021, despite growing competition from states bordering Mississippi.

Mississippi is one of a few states whereby it did not need to pass any new legislation to authorize sports betting after the Supreme Court’s repeal of PASPA. The interpretation of existing legislation meant that sports betting fell under the umbrella of permitted gaming activities by the state’s casino statute. 

Does MS face competition from neighbouring states?

In early 2021, the bills introduced in the House and Senate aiming to legalize statewide online sports betting did not even stand a vote. The deadline to advance the bill out of committee expired and thus neither the House or Senate had an opportunity to vote on the new proposed legislation.

Lawmakers may eventually cave to commercial pressures as their competitive advantage erodes with neighbouring states regulating, and allowing statewide mobile and online betting. 

The competitive landscape in Mississippi is already tough, with 26 commercial casino properties and 3 tribal casinos within the state boundaries alone. MS casinos in the Tonica and Lula market compete with Arkansas’ Southland Casino Racing racino for Memphis customers, while those on the Gulf Coast face competition from Louisiana operators.

With Louisiana, Tennesse and Arkansas all offering statewide mobile wagering, Mississippi could well be left behind. Careful policy, tax considerations and licensing charges could comfortably offset the burden of a slight reduction in tourism to the state’s commercial properties. 

According to the American Gaming Association, Misssissipi’s Gulf Coast and Tonica/Lula regions were the two fastest growing commercial casino gaming markets in the country when compared to pre-pandemic revenue totals for 2019.