Mississippi House panel approves casino tax increase, signaling warning over stalled online sports betting

In an obvious shot at the Senate and at least part of the casino lobby for the state not legalizing online gambling, the House Ways and Means Committee on Tuesday approved a tax increase on casinos.

Ways and Means Chairman Trey Lamar said his bill, which would increase taxes on Mississippi casinos from 12% to 16%, is to recoup the tens of millions of dollars a year Mississippi is “losing” from not legalizing online betting. He said, “if everybody’s honest with themselves, online sports betting is already going on” illegally, but the state is not generating any taxes from it.

He said his bill, which now heads to the full House, is also aimed at shedding light on why the online betting bills the House has passed in recent years die in the Senate. Some Mississippi casinos, particularly smaller ones that might struggle to contract or build online betting infrastructure, have opposed the move.

“The goal post continues to be moved on the other end of the building (the Senate),” Lamar told committee members. “We’re going to tax it appropriately. There needs to be some further light shed on this topic … (Illegal online gambling) has reached pandemic level … It’s my understanding that a small handful of casinos are standing in the way of that legislation. “

Lamar said he’s been given estimates ranging from $26 million a year to $80 million a year the state could generate in revenue from online gambling — so he estimates it at about $50 million. Neighboring Tennessee, which legalized online gambling, is making about $140 million a year.

Currently Mississippi casinos pay 12% in taxes, 8% going to the state and 4% to local governments and schools. Lamar said increasing the state’s share to 12% would generate an estimated $50 million a year.

Senate Gaming Committee Chairman David Blount criticized Lamar’s tax increase on Tuesday, and the House’s major tax overhaul proposal, which would eliminate the income tax, but raise gasoline and sales taxes.

“The House is fixated on raising sales taxes, increasing the gasoline tax and raising taxes on Mississippi businesses,” Blount said. “I don’t support a 50% tax increase on Mississippi businesses (casinos) that are vital to our state. The House wants to raise taxes on everything Mississippians buy and every time they go to the gas station, and they want to raise taxes on one of the largest employers in our state.”

The move marks the first time in at least a decade that there’s been serious talk of raising the casino tax in Mississippi. The state’s relatively low and stable tax rate on gambling has been credited with helping the industry grow over years. However, some in the industry say gross gambling revenue growth has been stagnant in recent years because of illegal online gambling in Mississippi or legal online gambling in neighboring states.