Mississippi will foretell future of sports betting

Jul 5, 2018 9:56 AM

By Robert H. Mann

Look for Mississippi, of all places, to provide the first real clues as to what might take place in what should become the exploding business of national sports wagering. Count me among those who believe Mississippi is the state, rather than New Jersey or Delaware, where sports betting regulations will provide “Petri Dish” conditions from which this newly legal form of gambling will succeed or fail.

For those who may have forgotten your high school biology, the Petri or Petri Dish is named after the German bacteriologist Julius Richard Petri (May 31, 1852-Dec. 20, 1921) who developed a shallow, cylindrical glass-lidded dish to grow cells for study.

When this Gulf Coast state opens for sports betting, possibly as soon as July 21, we will begin to see if the regulations and a tax rate on sports betting revenues of 12 percent will allow it to create an environment for growth or a setting for failure. And, if things don’t go right, look for state legislators to go back and fix them.

Mississippi got the jump on its neighbors in Florida and Louisiana legalizing casino gambling on June 29, 1990 when the Mississippi Legislature passed the Mississippi Gaming Control Act. This act allows casino gambling in counties along the Mississippi River and the Gulf Coast, as long as the voters in those eligible areas approve it.

Mississippi has 30 casinos along the Mississippi River and on the Gulf Coast that are state-regulated, in addition to tribal casinos operated by The Choctaw. That’s another reason it’s the state to keep an eye on.

Louisiana began casino-style gambling on Nov. 8, 1993, when the Star Casino on Lake Pontchartrain opened its doors. That meant that in less than a decade, Louisiana welcomed three forms of legalized gambling: a state lottery, video poker machines, and casinos on the state’s rivers and at the foot of Canal Street in New Orleans.

Florida voters persistently said no on casino gambling amendments in 1978, 1986, and 1994. At last, in 2004, a majority of Floridians voted in favor of legalized casino gambling. The Seminole Tribe and its now national Hard Rock gambling brand largely control casino gambling in Florida. By virtue of its contract or what most call a “compact,” in apparent deference to previous arrangements between Native American leaders and state and federal governments, the Seminoles pay a major cut (12 to 15 percent of its net win) to the state in exchange for what is viewed by many as a near monopoly.

An outside observer, such as myself, can’t help but take note of the fact that in Florida, the Seminoles call the shots when it comes to casino gambling. In Louisiana, the large corporate casino gambling entities such as Caesars, Penn National, Boyd Gaming and others seem to have the biggest influence.

But in Mississippi, by far the smallest in population of the three states, there is a mix of a forward-thinking tribal operator, the Choctaw, and two of the Nevada-based big boys, MGM Resorts International and Caesars Entertainment, as well as several other major players including Penn National and the Golden Nugget.

In all three states, and I suppose in every state with casino gambling, the state government establishes regulations, grants gambling licenses to worthy applicants and through its collection of tax dollars is a “de-facto” partner. The reality of the arrangement is: What’s good for the gambling company is good for the state because it means more tax dollars to either bail the state out of its never ending budget problems or to keep taxes from getting any higher than they already are.

In any case, the casino/resort business in Mississippi was a booming business. Its initial burst was provided by significant numbers of visitors from Louisiana and Florida. However, since those two states went into the casino gambling business for themselves, the boom in Mississippi is not so loud.

Now, by once more getting the jump on those two states by allowing sports betting in the next few weeks, state leaders again hope to lure customers from its neighbors, including Alabama. The wheels of government grind a little less slowly in Mississippi than its neighbors, so the attitude is let’s make a buck while the other major southern states figure out what to do.

My buddy in New Orleans has already informed me tour bus operators are heavily advertising day trips to Mississippi to gamble, bet sports (most likely LSU and Tulane), have lunch and return home.

While Florida and Louisiana drag their feet for political as well as practical reasons too extensive to delineate here, Mississippi again will be first to offer sports betting in the sports-mad culture of the Deep South.

MGM is expected to open for business first at books at its Tunica and Biloxi properties with Caesars expected to follow soon afterward. The Choctaws, with three rural casinos, have already said they want to be in the sports betting business as soon as possible. State regulations will allow betting on state schools such as Ole Miss and Mississippi State, the two Southeast Conference stalwarts. In New Jersey, betting on state schools is not allowed. That’s on the plus side for Mississippi.

On the negative side, although mobile betting on a phone or computer will be allowed, users must be physically at the casino venue. Unlike New Jersey, expected to open for online sports betting soon, Mississippi is saying no to the online element.

However, because the Choctaw operate on tribal land in less populated areas (near Philadelphia and Heidelberg), they certainly must be exploring operating an online sports betting site. If their tribal status allows them to house their betting operation on their native land, but take bets from other parts of the state, they could easily dominate the marketplace. The Choctaw are not subject to state regulation, so that makes this an interesting point.

However, if a mobile component makes them a formidable foe for MGM, Caesars and the others, look for the possibility of a faster track for federal sports betting regulations.

The possibilities and permutations in Mississippi seem to be endless and it will surely be fascinating to see what happens.