In slightly more than two months since it started on November 25, 2019, the Mississippi Lottery has generated $16 million in revenue. Mississippi Lottery Corp. President Thomas Shaheen predicted in its first full fiscal year, the lottery would produce $81 million in revenue for the state.
“We are very pleased with these early results,” Shaheen said. “Retailer and player support have been fantastic in our collective efforts to raise money for roads, bridges and education needs for the state of Mississippi.”
The legislature approved the lottery during a special session in August 2018. The measure specified the first $80 million in lottery revenue would go to road and bridge improvements; any money beyond that would go to education.
Shaheen told legislators the lottery began with four scratch-off games and now offers 16. National draw games Powerball and Mega Millions launched on January 30.
Shaheen said the state averages about $10 million weekly, ranking Mississippi sixth in the U.S. in per capita scratch-off sales. He said the Lottery Corp. returns 58 percent of the money generated from sales to customers as winnings. That’s less than the national average and also less than surrounding states’ winning returns of about 65 percent. However, Shaheen said as the Mississippi Lottery matures, the percentage of money returned as winnings will increase.
State law limits administrative costs to 15 percent of the total revenue, but because the Lottery Corp. had to take out a loan to begin operations, administrative costs currently are about 18 percent of sales. No state funds were allocated for the start-up costs, Shaheen said.
Currently, about 1,550 retailers sell lottery tickets. Mississippi was one of the last states to approve a lottery. Now only Alabama, Alaska, Utah, Nevada and Hawaii do not offer a state lottery.
Although Mississippi lagged in establishing a lottery, it was the third in the U.S. to pass sports betting. However, the legislation only allowed bets to be placed at the state’s 24 land-based licensed retail sportsbooks, which has resulted in disappointing revenue numbers. In 2019 the state’s sportsbooks took in $370 million.
By contrast, New Jersey, where 87 percent of all sports betting wagers take place online, took over $500 million in January 2020 alone. But revenue on Mississippi’s handle was $44 million, meaning the hold percentage is much higher than the industry average. The state taxes sports betting at 12 percent, resulting in $5.3 million going to the state government in 2019.
State Rep. Cedric Burnett’s HB 172 would allow any licensed casino to launch an online sports betting platform. A similar bill died in the House last year. The measure that allowed onsite-only sports betting could include limited mobile betting if the casino wanted to offer it, but bettors only could place wagers via the mobile app while on the property. To date, no casino has launched a sports betting app.
Mobile sports betting revenue would be taxed at 6 percent when operators report revenue of more than $134,000 in a month. Retail sports betting typically is taxed at 12 percent, with 8 percent going to the state and 4 percent to the casino’s local government.
Beyond Mississippi, only Tennessee has passed sports wagering legislation, which has yet to launch; no other neighboring states offer mobile sports betting. Arkansas only offers retail betting.
