Uneasy Lies The Head Of Gambling's King Of The South

September 29, 2022
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As the casino industry celebrates its 30th anniversary this year in Mississippi, the Magnolia State’s reluctance to embrace online betting continues to pose a threat to its status as the South’s top gaming state.

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As the casino industry celebrates its 30th anniversary this year in Mississippi, the Magnolia State’s reluctance to embrace online betting continues to pose a threat to its status as the South’s top gaming state.

On August 1, 1992, the Isle of Capri ushered in modern gaming in Mississippi by opening two riverboat casinos in Biloxi, a city on the coast of the Gulf of Mexico.

After enduring the cataclysm of Hurricane Katrina in 2006, the BP oil spill in the Gulf of Mexico in 2010, and not to forget COVID-19, Mississippi casinos produced a record $2.7bn in 2021.

This year’s 30th anniversary celebration got a head start on May 5 when about 500 guests — some from as far away as Japan — jammed the ballroom of MGM Resorts International’s Beau Rivage Casino in Biloxi.

Biloxi has been described as “a poor man’s Riviera.”

“Before the casinos, Biloxi and the other towns on the Gulf Coast in Mississippi were not exactly magnets for tourists outside of the immediate region,” said Ronnie Jones, a former chairman of the Louisiana Gaming Control Board who is now an industry consultant.

“Now it’s a happening place, and the casinos made all the difference.”

Louisiana is Mississippi’s western neighbor and cordial gambling competitor since opening its first riverboat casino in November 1993.

But Mississippi has traditionally had the upper hand, partly because Louisiana required its riverboat casinos to be maritime vessels until May 2018, while Mississippi has long allowed dockside gambling, which is more convenient.

“Of course now the riverboats [in Louisiana] are moving onto land. So those changes in Louisiana law have taken away advantages that Mississippi once had vis-à-vis Louisiana,” said Ron Rychlak, a professor at the University of Mississippi School of Law who has written extensively about gaming law.

An even bigger dynamic in the evolving gambling relationship between Mississippi and Louisiana is sports betting.

To put it bluntly, Louisiana is killing it with online sports wagering while Mississippi continues to restrict wagers to brick-and-mortar casinos.

Through the first eight months of this year, retail sportsbooks in Mississippi casinos generated some $28m in gross revenue on almost $285m in handle.

After launching mobile sports betting in January, Louisiana’s sports wagering market generated $139.4m in revenue from a handle of nearly $1.31bn.

Louisiana is not the only Southern state challenging Mississippi’s supremacy in gaming.

Arkansas also has launched online sports-betting operations and Stacey Abrams, this year’s Democratic nominee for governor of Georgia, has embraced casinos and online sports wagering on the campaign trail.

Moreover, Tennessee is making a huge mark in online betting even though it does not have any casinos.

"I don't think any of these expansions necessarily diminish Mississippi's reputation as a top gaming state, but it is something that we have to watch and assess to make sure we don't lose the advantages that our market has," said Jay McDaniel, executive director of the Mississippi Gaming Commission.

"I think there is a lot we can learn from watching other states do things, but I don't think that another state's success necessarily weakens what has been built here."

The Mississippi state Senate considered an online sports-betting bill earlier this year, but the measure did not even make it out of committee.

“I expect action on that (online sports betting) within the year, but there are some real concerns about that kind of gambling. I expect some pushback,” Rychlak said.

The current situation contrasts starkly with the immediate aftermath of the landmark decision by the U.S. Supreme Court on May 14, 2018 authorizing states to legalize sports betting.

“Mississippi was the first state to allow on-site sports betting outside of Nevada,” said Scott Waller, president and CEO of the Mississippi Economic Council.

“Our state law had a provision that allowed on-site sports betting as soon as the Supreme Court decision was finalized,” Waller said.

As a result, the first sports bets at Mississippi casinos occurred on August 1, 2018, on the 26th anniversary of the gaming industry’s debut in the state.

Waller, like Rychlak, is optimistic about prospects for online sports betting in Mississippi.

Others are not as sanguine.

Some Mississippi lawmakers even lament inadvertently voting for sports betting through language in a 2017 fantasy sports bill even though it is restricted to brick-and-mortar casinos, according to an industry source who requested anonymity.

The outlook for internet gambling is even more grim.

"I think an authorization of full casino gaming online would be a direct competitor to the robust retail market that is already in place and which is a strong economic driver of jobs and tourism," said McDaniel, the state gaming commission chairman in Mississippi.

"I don't think internet casino gaming is necessary for our state and would be disruptive to what is in place," McDaniel said. "But that is just my opinion."

Sports betting has been called the appetizer while internet gaming is the entrée when it comes to online gambling revenue.

But right now, Mississippi does not appear to be hungry for either one.

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