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The Mississippi general fund garnered $54,000 in revenue from sports betting in August – the first month that people were allowed to wager on sporting events at the state’s casinos.
The amount of revenue that will be generated by Mississippi legalizing sports betting has been a great unknown with politicians saying earlier this summer it could provide as much as $35 million annually for state coffers. More recently it has been estimated that betting on sporting events at Mississippi casinos would generate anywhere from $3 million to $15 million annually in tax revenue for the state. Based on August, it could be less than $3 million.
After one month of activity, though, the impact of sports betting on state coffers probably is still an unknown. August is not considered a true indicator of how much revenue will be generated because all of the 28 state-regulated casinos along the Mississippi River and Gulf Coast did not offer sports betting for the full month.
Revenue collections from sports betting were part of the overall August revenue report recently released by the staff of the Legislative Budget Committee.
Earlier reports from the Mississippi Gaming Commission said patrons wagered $9.8 million from the time sports betting started at some Mississippi casinos on Aug. 1 through Sept. 2. The casinos pay a 12 percent state/local tax on their earnings, resulting in the $54,000 in tax collections for August.
While the $54,000 collected in August will go into the general fund that provides money for such items as education, public health and law enforcement – starting Sept. 1 the money is being earmarked for transportation needs on state highways and bridges.
The legislation to divert the sports betting money to transportation was passed during an August special session. During the special session, the Legislature also enacted a lottery and directed the first $80 million of that revenue to the same transportation fund.
But House Pro Tem Greg Snowden, R-Meridian, said recently some estimate it will take up to two years to enact the lottery, though, he said there is a possibility it could be done in about a year.
State Department of Transportation officials have said they need an additional $400 million annually for expanding transportation needs.
While the additional revenue from sports betting was minimal for August, gambling tax revenue still was up for the first two months of the fiscal year, according to the August revenue report recently compiled and released by the staff of the Legislature Budget Committee. Gambling revenue for July and August is up $1.5 million or 6.8 percent.
Overall, though, revenue collections for the first two months of the fiscal year are $4.1 million or 0.6 percent less than the amount collected during the same period last year.
The big drop occurred in corporate tax collections, which are $11.3 million or 45.7 percent below the amount collected during the same period last year.
Corporate tax collections have dropped in recent years as multiple tax cuts passed by the Legislature continue to be phased in.
In fiscal year 2015 (July 1, 2014, through June 30, 2015) corporate tax collections peaked at $714.1 million In the most recently completed fiscal year, the state collected $572.3 million in corporate taxes.
While overall revenue collections are down compared to last year, collections still are $17.8 million or 2.6 percent above the official estimate. The estimate is important because it represents the amount of money the Legislature appropriated. If revenue falls too far below the estimate, leaders are forced to make budget cuts or dip into reserve funds.