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How Important Would Sports Betting Be to the State of Mississippi?

Enacted in 1992, the Professional and Amateur Sports Protection Act (“PASPA”) effectively prohibits sports betting in the U.S. at both a federal and state level other than for a few exceptions that benefit four states (Nevada, Oregon, Delaware, and Montana). In recent years, some state governments and professional sports leagues have completely altered or at least moderated their stances against legal sports betting in the United States, most notably in response to the proliferation of Daily Fantasy Sports. In light of what has happened in regulated markets in the U.S. and overseas, additional states have pushed for revisiting regulated sports gambling.

Interest in sports betting increased even more with the news that the Supreme Court of the United States (“SCOTUS”) agreed to hear New Jersey’s appeal from the Third Circuit decision upholding PASPA in Christie v. National Collegiate Athletic Association. Depending on how the Supreme Court rules in Christie, it may be possible for states to legalize and regulate sports betting. Many states are anticipating a friendly ruling from the Supreme Court and taking steps now to ease their entry into the sports betting space when able.

Mississippi is one of only a handful of states that have already taken necessary action. In the 2017 session of the Mississippi Legislature, a Daily Fantasy Sports bill made minor changes to the Mississippi Gaming Control Act, and notably removed language that provided that no wagering could take place on an athletic event that did not take place on licensed casino premises. The amended law simply left in place the requirement that the wager be made on the casino premises.

With this change in the law, Mississippi is arguably ready to be one of the first states to implement sports wagering in the event of a favorable ruling by the Supreme Court with respect to PASPA. Of course, regulations would have to be put in place by the Mississippi Gaming Commission in order to protect the integrity of the betting procedures, provide for internal controls and other necessary items.

Many argue that sports betting alone will not provide much, if any, additional gaming revenue to the Mississippi casino industry or additional gaming tax dollars to the Mississippi treasury. But, other industry professionals dispute that. When one Tunica County casino operator recently was asked what sports betting could mean for Tunica, he replied “it would save us”.

While it is true that sports betting itself may not produce a significant amount of additional gross gaming revenue, additional traffic to Mississippi casinos could mean millions of dollars to the state gaming industry in food and hotel room sales and additional gaming revenue due to visitation from surrounding jurisdictions.

Why would additional patrons come from adjoining jurisdictions? Because sports betting is not yet legal in those jurisdictions and may not be for some period of time, if ever. Thus, Mississippi might get the “jump” on its surrounding states and reap the benefits.

Below is a summary of the current status of sports betting in neighboring jurisdictions.

Alabama

There is no constitutional prohibition on games of chance. However, only pari-mutuel gambling at greyhound and horse racetracks are allowed, and all gambling devices are banned (outside of tribal gaming). Sports betting could be allowed legislatively, but would require a significant overhaul of the state’s gambling infrastructure.

Arkansas

Only the lottery and pari-mutuel gaming are explicitly authorized by the Arkansas constitution, but in 2005, “electronic games of skill” were legalized, though only for use at horse racing and greyhound racing parks. An Arkansas Supreme Court decision has already established that pari-mutuel betting on horse racing is not an illegal lottery since the “element of chance” is not a controlling outcome of the horse race. It is feasible that, were PASPA overturned, Arkansas could legislatively allow sports gambling in the same way it allowed “electronic games of skill,” though that would only be at the same two locations (Oaklawn Park and Southland Gaming). Several constitutional amendments to authorize additional casinos in Arkansas have been defeated in recent years.

Florida

Florida offers a mix of tribal and non-tribal gaming facilities. The Seminole Tribe’s Hard Rock Casino in Tampa (as well as its other facilities in south Florida) offers slot machine gaming and banked card games. Otherwise, slot machines are not allowed at non-tribal pari-mutuel facilities outside of Broward and Miami-Dade counties. No pari-mutuel facility may offer banked card games. Under current law, the Florida legislature has the authority to allow sport gambling. However, if non-tribal facilities are allowed to conduct such gaming, that could cause issues with the exclusivity granted to the Seminole Tribe under its compact with the state.

Louisiana

There is no constitutional prohibition on games of chance in Louisiana. There are three bills currently under consideration in Louisiana to legalize sports betting. The first, Louisiana Senate Bill No. 266, provides for a state-wide referendum election in November 2018 in which voters would decide whether or not to allow sports wagering to be conducted by current licensees. This bill was approved by a Senate committee on April 3, 2018, but still must pass a vote in both the Louisiana House and Senate. Louisiana House Bill No. 245 adds a definition of “game” to include “…any wagering on any type of sports event…” and authorize such “games” to be conducted at live horse racing facilities. Rather than allow all live horse racing facilities to host such “games”, the legislation instead proposes that, any live horse racing facility desiring to offer such games must make an application to the parish in which it resides to allow a referendum election on whether or not to allow the proposed gaming activity. The language of Louisiana Senate Bill No. 398 is substantially identical to that of Senate Bill No. 266.

Tennessee

The Tennessee Constitution prohibits the legislature from authorizing games of chance associated with casinos, including but not limited to, slot machines, roulette wheels, and the like. In order for sports betting to be introduced into Tennessee, a constitutional amendment repealing the prohibition on games of chance would be required.

Of the above jurisdictions, Louisiana and Alabama have the lowest impediment to implementing sports betting, though Alabama has exhibited significant reluctance to expand gaming operations in the state.

© 2019 Jones Walker LLP

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About this Author

Thomas Shepherd, Gaming Attorney, IAGA President, 2014, Jones Walker Law FIrm
Partner

Tommy Shepherd is a partner in the firm’s Business and Commercial Transactions Practice Group. As an accomplished gaming attorney, he served as President of the International Association of Gaming Advisors (IAGA) in 2014.

Tommy represents major casino companies, Native American tribes, manufacturers, suppliers, and financial institutions regarding all matters relating to the development, financing, licensing and operation of gaming and resort facilities. His extensive experience in such matters includes public-private leases, financings, land use approvals, statutory and regulatory...

601.949.4711
Zachary Branson, Jones Walker Law Firm, Jackson, Business and Transaction Attorney
Associate

Zachary W. Branson is an associate in Jones Walker's Business & Commercial Transactions Practice Group, working in the Jackson office. Mr. Branson's practice includes commercial real estate, commercial transactions, and corporate counseling. He has experience in complex, multi-forum litigation and has represented clients in a range of industries, including construction, manufacturing, and entertainment.

Mr. Branson received his juris doctor degree from the University of Virginia School of Law, where he served on the Editorial Board of the Virginia Tax Review. He was also a member of the Virginia Law & Business Society and worked with the Virginia Active Angel Network (VAAN.)

601-949-4810