The Mississippi House recently went all-in to legalize online sports betting in the state.
House Bill 4074 passed 101-10, a surprisingly large margin, especially when you recall that the much-hyped school choice legislation got through the House by only two votes before dying in a Senate committee.
The Senate received the bill from the House on Feb. 26, but so far it hasn’t been assigned to a committee for review. Maybe the Senate is continuing its dismissal of House legislation as payback for last year’s income tax cut legislation? In any case, the bill must go before the full Senate by March 17 or it will die.
If it fails this year, another online sports betting bill will be back next year. There are things to like about it — and things to dislike.
For example, House advocates of the legislation have increased their estimate of how much tax money the state would take in.
In getting the bill through the House, supporters predicted Mississippi would pocket $100 million annually from a 22% tax of online gambling revenue. Last year that estimate was in the $70 million to $80 million range, based on an 18.5% tax.
According to the Magnolia Tribune website, this year’s House bill also would direct $50 million a year, for a decade, in online sports betting tax revenue to the Public Employees Retirement System. That $500 million could only help PERS and the retirees it supports.
The legislation also offers some goodies to the state’s existing gambling companies. The gaming tax paid by casinos, currently at 8%, would be reduced to 6%, allowing the gambling houses to keep an extra $48 million per year.
The online companies would not need a Mississippi gaming license, but they would have to sign a contract with a Mississippi casino operator in order to take bets in the state.
Of course, that tax cut cancels out nearly half of the anticipated $100 million that online sports betting would bring in. Which means that almost all the remaining revenue from this new form of gambling would go to PERS.
Can the prospect of extra money from a new “sin tax,” one that is willingly paid by online bettors, sway lawmakers? It certainly looked that way from the results of the House vote. The Senate, for whatever reason, appears to be far less impressed. It’s been the place where online sports betting bills go to die.
However, there are reasons for Mississippi to be wary of the revenue bait.
The single biggest concern is the skill at which companies are able to entice their customers to spend money. Part of the lure of online sports betting is that you can quickly put money down on just about any part of a game. What’s the next play? Who scores first? Will a certain player get a touchdown? And so on.
Americans love their sports, and it’s easy to see some bettors getting carried away by these temptations, losing money they don’t have. It’s already happening: The biggest concern about online betting is that universities in Mississippi are reporting problems with it among their students. Legalizing it would make things worse.
To the bill’s credit, it orders the online companies to monitor their customers and report signs of problem gambling. It sets monthly spending limits for bettors under 25. But being realistic, anybody who’s hooked on gambling through a smartphone is going to find a way around such limitations.
The Senate may continue to kill online sports betting. At some point, though, the logical bet is that the extra money will be too much for lawmakers to turn down.
Jack Ryan is editor and publisher of the McComb Enterprise-Journal.
