Sports Betting in Mississippi Clears Final Hurdle

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Thursday, June 28th, 2018 | Written by Charles Washington

The Mississippi Gaming Commission approved regulations to permit sports betting within the state on Thursday, June 21, 2018. The new rules will come into effect on July 20, and we may see sportsbooks open up inside Mississippi casinos that same day.

MS Sports Betting Details

The organizations that will be allowed to offer sports betting in Mississippi are those that already possess casino licenses, but they will have to be approved specifically to operate sportsbooks. Partner organizations providing software and other infrastructure at the behest of casino management will require manufacturer and distributor licenses, and as an extract from the update regulations states:

“Applications for such a license must be made, processed, and determined in the same manner as applications for gaming licenses, using such forms as the Commission may require. Employees of such a noncasino entity shall be licensed or permitted consistent with the applicable provisions of the Gaming Control Act and these Regulations.”

There are currently 28 commercial casinos within the state, and many of them are racing to be able to provide this service next month as soon as they’re legally able to do so.

Sportsbooks will only be allowed to accept sports wagers on premises. There are provisions in the regulations for electronic and mobile betting, but customers who wish to put money in action via these means will have to first appear in-person at a sportsbook to establish an account. Even so, such wagering would still have to abide by location restrictions mandating that the customer be physically present at a licensed property when making his or her bets.

Wagering on the outcomes of political elections and non-collegiate, non-Olympic amateur sports is strictly prohibited. Other bets that are not related to athletics or animal racing would have to be approved in writing by the Executive Director of the Gaming Commission in advance. Coaches and players are barred from betting on their own games.

The menu of bet types permitted on allowed events is not prescribed by law. There’s no language in the regulations preventing parlays, propositions, wagers on total score, spreads, or any of the other common kinds of sports bets.

Taxes and Fees

There’s no mention of any license fees that will be levied on entities seeking to be approved for sports betting. Presumably, the $5,000 application fee and $5,000 yearly license fee that they already pay for casino gambling will suffice to cover sports betting too.

Similarly, the Mississippi Gaming Commission hasn’t directly said how much the fees will be for manufacturers and distributors of sports betting products. Therefore, it’s very likely that they will be the same $1,000 for manufacturers and $500 for distributors that’s currently paid annually by firms in the casino industry.

Sports betting revenue will be treated the same as casino gaming revenue for taxation purposes. Mississippi taxes gross gaming revenue above $134,000 per month at a rate of 8%. Lower tax rates apply for smaller levels of revenue. In addition, there are local and municipal taxes and fees that vary across the state but tend to be approximately 3.2% of revenue. Thus, the total tax bill for legalized sportsbooks will be in the ballpark of 11.2%.

It’s important for would-be sports bettors to note that Mississippi casinos are required to withhold 25% of wins above $5,000 for federal income tax purposes. This applies to sports wagers too.

History of Mississippi Sports Betting

The Magnolia State has had a sports betting law in place since March 2017 although the majority of the text concerned daily fantasy sports rather than traditional bets on sports. A clause in the DFS bill struck down the Mississippi prohibition on wagering on sporting contests, so this activity became legal according to state law once the governor signed the bill.

However, it still remained illegal at a federal level for almost all states to license and regulate sports betting until the Supreme Court issued its verdict in Murphy v. NCAA, which overturned this ban.

The Supreme Court ruled on the case on May 14, 2018, and within days, the Mississippi Gaming Commission had created draft regulations to implement sports betting at authorized casinos. The preliminary text was opened up for public comment before receiving final approval on June 21 with its provisions to become active 30 days later.

Choctaw May Leap Ahead of Competition

The Mississippi Band of Choctaw Indians already has a gaming compact with the state under which it operates three casinos. A close analysis of this compact shows that it allows the Choctaw to accept wagers on sporting events as long as this doesn’t break federal law. Thus, the tribe doesn’t have to wait for the approval of the state’s Gaming Commission.

On May 31, the Tribal Council voted to amend its regulations to authorize sports betting at its casino locations. The group aims to become the first Native American organization to host such betting, and it may also beat all the state’s commercial casinos to the punch. Nevertheless, any first-mover advantage that it obtains will be short-lived because of the expected launch of many competing sportsbooks on July 20.

Effects of the Sportsbook Regulations

Once sports betting goes live, Mississippi will be the only state in its region to feature this type of wagering. Louisiana, a major competitor with Mississippi for casino gambling revenue, saw a push to adopt sports betting legislation this year, but these efforts failed to bear fruit. Mississippi may therefore see substantial increases in its gaming profits as visitors opt for its casinos rather than those in neighboring Louisiana.