During a series of discussions within the Mississippi legislature, the House Ways and Means Committee took a significant step toward imposing a higher tax on state casinos. On Tuesday, the committee approved a proposal to modify casino taxation, raising it from the current rate of 12% to 16%. This proposal appears to be a tactical response to the state’s decision not to legalize online gambling.
Trey Lamar, the Chairman of the House Ways and Means Committee, justified the proposed tax increase by highlighting the potential financial losses Mississippi incurs annually from not having legalized online gambling operations. He asserted that despite its current illegal status, online sports betting is prevalent within the state, and regulating it would allow the state to benefit from associated tax revenues.
Lamar emphasized that the legislation could serve to investigate the reasons why proposals encouraging online gambling legalization have consistently stalled in the Senate, despite previously passing the House. He speculated that opposition from smaller casinos, which may lack resources to establish online gambling infrastructure, could be a factor hindering progress. He voiced frustrations that the conversation and policies around online betting consistently shift within the legislative process.
The bill proposes an increase in the state’s share of casino taxes to 12%, which Lamar estimates could garner around $50 million annually for the state. His estimates are based on comparisons with revenue figures from neighboring Tennessee, where online gambling legalization has proven financially beneficial, bringing in about $140 million annually.
Currently, Mississippi collects 12% in taxes from casinos, with the division being 8% for the state and 4% designated for local governments and educational bodies. Lamar advocated for revising this distribution to maximize the state’s financial benefit and potentially reach an added $50 million in revenue.
There is pushback from the Senate, notably from Senate Gaming Committee Chairman David Blount, who criticized the initiative. Blount voiced concerns over the taxation reform, which is coupled with a wider tax overhaul proposal aimed at removing the income tax but increasing gasoline and sales taxes. Blount argued that imposing a 50% tax increase on key business sectors, like casinos, is counterproductive, suggesting it could negatively impact one of the state’s largest employment sources.
This proposal marks the first serious legislative effort in over ten years to raise the tax on casino operations in Mississippi. While the state’s low gambling tax rates have historically encouraged industry growth, some advocates argue that competition from legal online gambling in surrounding states and unregulated gambling activities within Mississippi are stunting industry revenue growth.
