Mississippi gamblers were raring to go after months of COVID-19 shutdowns paused casino operations in 2020.
An annual gaming report released by the American Gaming Association (AGA) shows Mississippi casinos have experienced a consistent rise in gaming revenue since then.
Mississippi casinos experience surge after lockdown
The $1.04 billion dollar gaming market of the Mississippi Gulf Coast is currently the fifth-largest in the United States. This data comes from the State of the States 2021 review provided by the AGA.
Gulf Coast casinos snagged this ranking from New York City, now the country’s eighth-largest market.
In all, Mississippi generated $213.8 million in tax revenue from the $1.8 billion in gross gaming revenue across the state in 2020.
The state generated $2.2 billion in revenue in 2019 before the pandemic. The 18.4% drop in 2020 is due to the state’s casinos shuttering for the pandemic as well as two hurricanes in the spring.
But things are on the rise.
If gambling continues at its current pace, Mississippi could log its highest gross gaming revenue this year since the 1990s.
Demand continues to soar. Casinos on the Mississippi Gulf Coast collected $151.7 million in April 2021, resulting in a lump sum of $31 million for state and local tax funds.
Increased wagering continued in May and June as travelers began to hit the road for summer, allowing the state to accumulate nearly $30 million from casinos statewide each month.
Gamblers wagered a record-setting $147 million at Mississippi casinos in June, marking the most-profitable month in South Mississippi history.
Surrounding states threaten ongoing revenue
In order to maintain this recent momentum, the Mississippi gaming industry will naturally have to protect itself against potential competitors.
When assessing the state’s competitive landscape, the AGA’s report names Alabama as Mississippi’s largest gambling threat:
“A further competitive threat to Mississippi’s commercial casino gaming industry comes from a potential expansion of gambling in neighboring Alabama. While the Alabama market is already served by electronic bingo devices at tribal casinos, a task force was established by Gov. Kay Ivey (R) in 2020 to study the state’s policy options regarding commercial casinos, expanded tribal gaming, a state lottery and sports wagering.”
Alabama currently features three tribal casinos and one commercial casino, though state legislation has recently considered expansion.
A February 2021 study suggested Alabama could earn an additional $400 million per year by expanding gambling options.
That bump in revenue could come from neighboring visitors as well as Alabama residents.
Tennessee has no local casinos. A rise in the number of casinos surrounding Tennessee could lead to more and more Tennesseans traveling across state lines to visit the properties.
Lottery and sports betting also contribute to state tax revenue
Along with the money Mississippi accumulates from casinos, the state also collects taxes from the Mississippi Lottery, a major source of revenue for the state.
In its first full year of operation after launching in 2018, the Mississippi Lottery accumulated roughly $80 million for statewide infrastructure projects and $50 million for public education initiatives.
Sports betting is another source of tax revenue for the state. However, Mississippi regulations limit revenue from this type of gambling.
Mississippi law prohibits online sports betting within the state. This means bettors have to physically enter a casino if they want to place a wager.
For many residents, it’s simpler to travel across state lines to place a bet. Out of Mississippi’s four bordering states, Tennessee offers the most viable alternative.
The Volunteer State launched its online-only sports betting market in November 2020 and has since generated roughly $24 million in privilege tax for the state.
Mississippi’s other three border states vary in regards to the level of threat posed.
Sports betting in Alabama remains prohibited both in person and online. And similar to Mississippi, Arkansas sports betting is conducted expressly within casinos.
Louisiana, however, could soon become Mississippi’s second-largest competitor, as its online and in-person sports betting market is expected to launch later this year.