The Mississippi Legislature, struggling for ways to fund state government in the midst of sluggish revenue collections, should have at least a little help on the way.
On Wednesday, the 52-member Senate approved with six no votes and sent to Gov. Phil Bryant legislation regulating and taxing fantasy sports. If Bryant signs the legislation into law, it will mean a new source of revenue for the state.
House Gaming Chair Richard Bennett, R-Long Beach, said he does not expect fantasy sports to generate a lot of revenue for the state, but, “I think it will grow.”
Fantasy sports is generally played online where individuals compose teams from real sports leagues and winners are determined by the statistical results of the online teams created by the participants.
Participants pay to play and have an opportunity to win based on the performance of the teams they compile.
Under the legislation heading to Bryant, a tax will be collected on 8 percent of the fantasy sports operators’ Mississippi earnings – just like the state tax paid by casinos. Casinos, though, also pay a 4 percent local tax.
Bennett said it is difficult to estimate how much the tax will generate because there is little information to glean from other states.
“They are just now doing what we are doing,” he said.
There have been estimates that the tax could generate as much as $5 million annually, although most say that might be an overly optimistic estimate. But even $5 million, while welcome, would be a modest amount in a budget of more than $6 billion.
The legislation was necessary because the office of Attorney General Jim Hood, like his colleagues in most states, determined that fantasy sports is a game of chance and thus illegal unless approved by the Legislature.
Last year, a bill was passed to legalize fantasy sports and to create a task force to make recommendations to the 2017 Legislature on how the industry should be regulated.
The legislation approved Wednesday is the result of that task force. The state Gaming Commission will regulate the industry, including vetting the companies that operate fantasy sports leagues in Mississippi.
Last year, Bennett said 12 companies applied to operate leagues in the state.
At one point, there were efforts, including by Rep. Steve Holland, D-Plantersville, to tie the enactment of a lottery to the fantasy sports bill. But in the end, those efforts were defeated.