Mississippi Gaming Commission Adopts Final Sports and Race Book Regulations

On Thursday, June 21, the Mississippi Gaming Commission (“MGC”) took a major step toward the goal of licensed sports and race books in state casinos by adopting governing regulations. A copy of the final regulations can be accessed here.

Differences between the draft regulations and the final regulations, as adopted, indicate that betting using smartphone apps while on casino properties will be permitted, as will establishing wagering accounts off-site subject to account holder identity verification at the casino property.

The next steps include:

  1. Licensing of manufacturers and distributors to provide sports betting services, systems, and equipment;
  2. Amendment of casino internal controls; and,
  3. Gaming lab approval of systems and equipment.

Several companies have already filed licensing applications, and the MGC staff is busy conducting due diligence investigations of the applicants and their principals.

We continue to predict that legal sports wagering will take place in Mississippi’s commercial casinos by Labor Day of this year.

What Has to Happen Before the First Sports Wager in Mississippi?

While many media outlets have reported that Mississippi is one of a handful of states on the forefront of preparing for legal sports betting after the Supreme Court declared the Professional and Amateur Sports Protection Act (PASPA) unconstitutional, there is a great deal that must happen before a Mississippi casino may accept legal sports wagers.

First, the Mississippi Gaming Commission must adopt implementing regulations. On May 17, 2018, the Commission approved draft regulations to be published for receipt of public comment.  If no public comments are received, the Commission could give final approval as early as June 21, 2018. The final regulations will become effective 30 days after adoption.

The draft regulations provide that sports betting service providers must be licensed as manufacturers and distributors under the Mississippi Gaming Control Act. Would-be sports betting service providers are already filing license applications with the Commission in anticipation of the draft regulations being finalized or being substantially similar to the current draft. Furthermore, while the company applicant must be investigated for licensing, company officers and directors must be investigated and found suitable, a process which can be time-consuming.

Any equipment used by prospective sports betting service providers must be tested and approved by an independent testing lab with testing reports to be submitted to the Mississippi Gaming Lab for final approval. Even large casino operators that plan to operate their own sports books will likely have equipment that must undergo this testing and approval protocol.

Casinos must also amend their internal controls to provide for sports betting and then submit those amendments to the Commission for approval.

Any casino employees working in the sports books or employed by the sports betting service providers must file applications for and receive work permits from the Commission.

Finally, while not dependent on any approval by the Commission, casino operators must make the physical changes to their respective properties required for their sports betting operation. For a smaller, standalone casino, this could be as simple as designating an area for installing several kiosks on which to place bets. For a larger casino which plans to have full sports book operations, this may necessitate significant construction on its gaming floor or elsewhere on the property.

While much work remains to be done before legal sports wagering in Mississippi may take place, we anticipate that the first bets will be taken by the kickoff of the college football season. We also continue to believe that those who act quickly to take advantage of this opportunity will reap significant rewards over a multi-year period.

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