A Mississippi group has concluded its quest to compile information and recommendations for potential online sports betting expansion in the state.
The Mississippi Mobile Online Sports Betting Task Force filed the report Friday and will inform future legislative efforts to expand Mississippi sports betting. While the report primarily outlines how various US markets are structured, it also highlights multiple ways to help limit adverse effects on land-based casino operators, many of which expressed concerns throughout the process.
This spring, legislators amended a sports betting bill to form the task force to better understand the online marketplace potential. Rep. Casey Eure, co-chair of the task force, told the group in October he will introduce sports betting legislation when the new session begins January 2. In-person Mississippi sports betting began in 2018, and sports betting apps are allowed on casino property.
Mississippi casinos remain large obstacle
Throughout the task force’s hearings this fall, multiple independent casino operators testified to express their hesitations about online sports betting.
The operators believe online gaming would cannibalize gaming revenue and send much of it out of state. They also fear online sports betting will quickly lead to online casinos in the state, furthering their losses.
There are 26 commercially owned casinos in the state, operated by 16 companies. While some are against expansion, others like Penn Entertainment and Caesars advocate for expanded online sports betting.
Mitigating losses for Mississippi casinos
During hearings, Sen. Mike Thomas said one of his primary concerns is ensuring protection for local operators. The report includes multiple suggestions to help limit local losses.
The task force already committed to tethering sportsbooks to casinos in the state to help mitigate cannibalization. The report also details whether in-person registration could help casinos keep customers, but says it will fail to maximize customer acquisition from unregulated gaming.
It also notes a revenue-share requirement from sportsbook operators to casinos could help limit online competition in the market. It uses 20% as an example opposed to 51%, a rate that has kept major sportsbook operators out of Arkansas.
MS task force details
Along with the land-based casino concerns, the task force report highlights information across US sports betting markets. The information will help inform future online legalization efforts, including Eure’s attempt next session.
The detailed information includes:
- Tax rates
- What to tax
- Licensing fees
- Marketing and promotional restrictions
Sports betting revenue projections
Since launching in August 2018, Mississippi sportsbooks have taken $2.3 billion in wagers and generated $265.9 million in revenue. The task force found sports betting revenue plateaued at approximately $61 million each year and $5 million in taxes.
Based on various online sports betting tax situations, the state could generate up to $26.5 million annually in sports betting taxes, according to the report. One of the situations includes a 10% annual decrease in in-person sports betting until mobile makes up 80% of the market.
Getting new sports betting customers
The task force said online sports betting would attract new customers, including those unwilling to drive to the casino areas and offshore bettors. The report estimates the state loses up to $6.2 million annually in tax revenue from unregulated gaming.
They also note gaming competition increased since Louisiana and Tennessee have legalized online sports betting. Proponents on the task force said legalizing online sports betting helps further the benefits of regulated gaming.
Between August 27 and October 22, GeoComply tracked more than 64,000 sports wagering accounts in Mississippi, attempting to access sportsbooks in Louisiana or Tennessee.
