If Mississippi is to pass a sports betting law in 2024, the benefits of taxation on online sportsbooks will be a driving factor.
Thanks to a recent study by Magnolia State’s Mobile Sports Betting Task Force, lawmakers have a thorough reference guide that even outlines the potential earnings.
The 13-member task force released its mandated findings on Dec. 15 and found that Mississippi could fill its coffers with as little as $5 million per year and as much as $27 million per year based on various presented tax models that can escalate from 2025 to 2029.
The task force detailed models used by other legal states and the 8% state tax rate Mississippi sports betting imposes on retail sportsbooks, which have been active since 2018.
“The peer report will take all of the findings and conclusions, any recommendations that came out of that task force and then it will be up to the legislator on what to do with those findings in a bill,” gaming commission director Jay McDaniel told WLBT.
Options on the table
Many of the presented options include an 8% rate on online operators’ gross revenue. That basic model would result in an estimated $6 million in 2025, the first year of live online wagering if a law is passed in 2024, and $12.6 million by 2029 based on market growth.
The task force added various options, like a 1% flat tax on sportsbooks’ handle that would increase the state’s revenue by $5 million to $13 million during the five-year period. A 2% flat tax would result in $13 million per year to $27 million per year by 2029, the most lucrative option for the Magnolia State.
The report also used various combinations of those models to show lawmakers different tax revenues.
See also: 10 Predictions, Bold and Otherwise, About Sports Betting in 2024
Adding to the case
These tax revenues are just the start of what pro-sports betting advocates hope to sell in 2024. The task force found through GeoComply, a technology company that tracks log-in attempts on sports betting sites, that 64,000 Mississippians attempted to access accounts in other states from Aug. 27 to Oct. 22.
Nearly 68% of those attempts tried to access Tennessee sportsbooks while 27.7% came from Louisiana-run operators.
The task force also estimated that illegal sports betting sites represented potential lost tax revenue ranging from $2.7 million (proportionate share of illegal gaming revenue taxed at 8%) to $6.2 million (proportionate share of illegal gaming taxes).
Pushback in Magnolia State
House Bill 606 was presented last year, but after it was amended to mandate the Mobile Sports Betting Task Force, progress stalled to await the findings.
And online wagering will be a contentious debate in 2024. Some Mississippi legislatures believe statewide mobile sports betting will take away from the 26 retail sportsbooks, eliminating jobs and possibly entire brick-and-mortar operations. Currently, through commercial and tribal agreements, retail sportsbooks can offer sports betting to help promote tourism. There is mobile wagering but players must be on-site to access accounts.
"The Mississippi gaming market operates on low margins. Anything that will reduce or lessen our revenues will harm our businesses and it will harm Mississippi," Michael Bruffey of the Island View Casino Resort wrote to the task force. "To state it succinctly, statewide online sports betting will reduce our revenues, it will reduce jobs, and it will harm Mississippi."
There are also responsible gaming concerns, and anything to do with iGaming has already been ruled out by the task force.
Coming in 2024?
Still, with the legislative session set to start back in January, the Magnolia State could be set to soon join the mobile U.S. market.
“I think that once that legislation becomes final, we as regulators will work as quickly as we can to get the regulations in place and to get it to where the operators can do it,” McDaniel said. “So, I think you’d be talking about a matter of months after the session ended that we could see something pushed out to the public.”
