Online sports betting statewide is one step closer to being allowed in Mississippi. On Thursday, the Mississippi House of Representatives voted overwhelmingly to let the Magnolia State join 29 other states plus the District of Columbia in offering the gaming product.
The 98-14 vote on House Bill 774 Thursday easily cleared the two-thirds majority the measure needed because it is a revenue-generating bill. The proposal to legalize mobile Mississippi sportsbooks now proceeds to the Senate, where it will also need a two-thirds majority for the legislation to go to Gov. Tate Reeves for consideration.
The vote was lopsided, but the 45-minute discussion was still lively at times. Opponents of the measure fear allowing people to wager from their phones anywhere in the state would decimate small, independent casinos that rely on foot traffic and their host counties that depend on the tax revenue. One amendment to cater to those gaming boats was tabled.
HB 774 would keep the 21-year-old age limit for bettors. The tax rate would start at 4% for operator gross revenues up to $50,000 each month, 6% for monthly revenues between $50,001 and $134,000, and 8% for all remaining revenues. The bill also sets aside 12% of the tax revenue for the state’s emergency road fund.
The estimates for annual tax revenue are about $30 million per year, but House Gaming Committee Chairman Casey Eure, R-Saucier, said those might be conservative.
One Partner Per Mississippi Casino
Under the bill, all 26 casinos could partner with one mobile sports betting partner each. Eure, the bill’s sponsor, said that was to protect the state’s brick-and-mortar gaming establishments. However, the measure does allow bettors to register online, meaning they would not need to visit the participating casino to create their account. Research from the past four years, the chairman said, showed requiring in-person registration impacts wagering traffic.
While casinos can only partner with one operator, Eure said operators can partner with multiple casinos. However, with more than 30 active online sports betting providers across the country, there are enough available for each casino to have their own.
But mobile sports betting in most states is dominated by FanDuel and DraftKings, as reports from those states show. In Ohio, those two operators combined for 73% of the operator revenue reported in 2023, and more than half of the 20 licensed online sportsbooks each held less than 1% of the market.
That was a concern expressed by small casino operators as Eure led a task force last year to study online sports betting. Eure used the committee, which arose from his effort to legalize it during the 2023 session, to develop the language for this year’s bill.
House Minority Leader Robert L. Johnson III, D-Natchez, raised those concerns again and said small casinos would miss out on partnering with the big operators, who are already connected with other establishments.
“The money from the platform, when you bet in Mississippi, it doesn’t go to every casino,” Johnson said. “It goes to the casino you have a contract with.”
Johnson’s amendment that would earmark tax revenue to the smaller casinos on wagers placed within a 40-mile radius of their county was defeated.
Data Shows Opportunity For Revenue
Mississippi was one of the first states to allow sports betting after the Supreme Court’s decision to strike down PASPA (the Professional and Amateur Sports Protection Act) nearly six years ago. However, it limited the offering to just on-site at the 26 casinos across the state. Sportsbooks, like BetMGM, could offer online apps, but they would only work on the casino’s grounds.
Eure told colleagues that, according to Google data, Mississippi was the top state for conducting searches to find offshore sportsbooks.
“It’s estimated that $64 billion was wagered on illegal sports bets across the United States last calendar year, said Eure. “Mississippi makes up 5% of that market, which is $3 billion.”
Bettors not going offshore are likely crossing state lines to place their bets. December 2023 Mississippi sports betting showed a bit less than $49 million in handle for December. Two neighboring states, Louisiana and Tennessee, each have statewide mobile betting. Louisiana routinely tops $300 million in handle (or bets accepted) per month at the busiest times of year; Tennessee is even bigger, exceeding $400 million per month in the fall and once going over $500 million.
Eure also referenced GeoComply reports indicating Mississippi had 9.3 million geolocation transactions, which occur when a sportsbook locates a bettor to verify their location in 2023. Texas, meanwhile, had just 5 million such transactions.
Sports betting apps can be accessed in Mississippi so bettors can view odds, make deposits or request withdrawals. However, the geolocation software blocks bettors from placing a wager.
“We’re losing our people to Tennessee and Louisiana,” he said. “I can’t tell you how many people drove across, placed a bet and came back. Mississippi loses out on those tax dollars.”
