There are lots of reasons why Mississippi should resist the national trend to make sports betting ubiquitous by allowing wagers to be placed online.
This state already has enough legalized gambling with privately operated casinos and a publicly run lottery. Sports betting is particularly pernicious because it appears to be highly addictive, so far mostly for young males. It also threatens to corrupt sports, with athletes, including at some Mississippi colleges, already being accused of taking payoffs from bettors to throw the outcome of games or to perform individually below expectations. Scandals like that are bound to proliferate.
State Sen. David Blount, the chairman of that chamber’s Gaming Committee, says there is also a fundamental financial reason to resist mobile sports betting: The numbers don’t work. What is being sold as a financial boon for Mississippi’s treasury, he says, would actually produce a net loss.
Here’s why:
Sports gaming proponents in the House, including Speaker Jason White, have been trying to overcome the opposition of brick-and-mortar casinos by offering to reduce the existing tax on casino gaming as a way to mitigate the losses the casinos might see from the competition of online gambling giants, such as DraftKings and FanDuel. The latest bill passed by the House would cut the state tax on casino wagers from 8% to 6%. That would translate into $50 million less annually for the state.
In return, these same House proponents estimate that a proposed 22% tax on mobile sports betting would produce $40 million to $60 million a year. That estimate is highly optimistic. The nonpartisan Tax Foundation’s formula predicts at best $30 million a year for Mississippi. That’s without taking into account the anticipated siphoning off of gaming dollars into “prediction markets,” a form of national betting that has the blessing of the Trump administration and is subject to neither state regulation nor state taxation.
Put these numbers together, and mobile sports betting, as proposed by the House, would drain about $20 million from the state treasury a year. What’s being sold as a no-pain way to prop up Mississippi’s ailing government pension plan would be no such thing. The state’s take from sports gaming might bolster the Public Employees’ Retirement System, but it would be at the expense of other government obligations.
The House is asking the state to place a bet that has no chance of winning. Congratulations to Blount for refusing to take that bet and killing the bill in his committee.
