STARKVILLE – Is everyone who plays fantasy sports a gambler? Of course not, just as not everyone who plays poker or blackjack is a gambler.
But are fantasy sports considered gambling by a substantial portion of the people who play it? Absolutely. Ask Joe Asher, operator of Nevada sports book operator William Hill U.S., who told the Las Vegas Review-Journal in 2015: “You put up something of value, cash, to win something of value, cash. It’s the classic definition of gambling.”
A bill that would make playing fantasy sports legal in Mississippi is now awaiting Gov. Phil Bryant’s signature. Earlier in the 2016 session, the bill was amended to include authorization of a lottery in Mississippi – something that has been bouncing around Mississippi’s political landscape for the last 25 years or so.
In most years, longsuffering State Rep. Alyce Clarke, D-Jackson, has carried the legislative torch for a Mississippi lottery, but it was Rep. Tommy Reynolds, D-Water Valley, who tacked on the lottery amendment to the fantasy sports legislation. But the lottery was stripped out of the fantasy sports bill late in the session.
Once again, the unintended coalition rose up to knock the lottery down. The unintended coalition is comprised of the existing casinos companies, their business friends, the political power structure loyal to both groups and the state’s churches.
For good or ill, proponents project that a state lottery could bring in $160 million a year in new tax revenues to Mississippi. Mississippi is one of only six states without a lottery and our citizens pour across state lines to patronize the game in surrounding states.
Another thing that Mississippi casino owners and operators did after getting a foothold in Mississippi in the early 1990s was to take a lesson from local option liquor and beer elections in the state on how to beat back competition. In booze elections, the unintended coalition is usually the “dry” county’s churches and the same county’s bootleggers.
The second thing those casino companies did was to hire very effective, very powerful, and very influential lobbyists to protect their virtual monopoly on legal gambling in Mississippi. Those lobbyists spin a compelling narrative against the lottery proposals that goes like this – that it’s really bad for the state to get in the business of luring citizens to play the lottery and that a lottery would “cannibalize” existing casinos gross receipts.
Mississippi’s churches — consistently — say Mississippi already has too much gambling and doesn’t need any more. Those sincere religious voices point out that while the casinos are isolated, lottery ticket sales would be in every community in Mississippi. Whether one agrees or not, who can’t respect that?
But in terms of state and local tax revenue, Mississippi missed the boat or at least the dockside establishment. In comparison with other states that have commercial casinos, Mississippi has the second-lowest state gaming tax rate in the country behind only Nevada. Mississippi levies a 12 percent tax rate on gross casino gaming revenues, of which 8 percent goes to the state and 4 percent to local governments. Louisiana levies 21.5 percent — plus another 4 percent local tax.
With over a million fewer gamblers visiting fewer casinos, Louisiana took in $440.9 million in FY 2015 gaming revenues while Mississippi with more gamblers and more casinos only collected $250.2 million in gaming revenues. No wonder the casinos like Mississippi. We’re easy pickings and the profit margins for them are much higher when the state collects less of their take.
Other states with casinos have lotteries – and many of those have racinos and other forms of legal gambling as well. The lack of protectionism for the casinos in those states don’t seem to have injured their casino industries.
And while protecting the casinos in Mississippi, taxpayers have seen gaming revenues steadily decline from $382.3 million in FY 2008 to the present $250.2 million in FY 2015. And competition continues to grow in the South.
Sen. Sean Tindell, R-Gulfport, chairman of the Senate Judiciary A Committee and the author of the fantasy sports legislation, is one who offers the “fantasy sports isn’t gambling” argument – calling fantasy sports a “game of skill, not a game of chance.”
I’m not opposed to fantasy sports. It’s another way that a fool and their money can soon be parted in my book, but to each his own. Live and let live.
I just hope that the 2017 Legislature will figure out a better way to tax fantasy sports – now a $70 billion industry – than they did casino gaming 25 years ago.
(Sid Salter is a syndicated columnist. Contact him sidsalter@sidsalter.com)