‘Most people don’t even realize it’s illegal’ but it could bring millions to Mississippi

Bettors on Oct. 1, 2017, at the Westgate SuperBook in Las Vegas, where wagering on college football games is rising at the expense of betting on NFL games. If the Supreme Court overturns the federal law that prohibits sports betting outside Nevada, Mississippi casinos could be among the first to allow it.
Bettors on Oct. 1, 2017, at the Westgate SuperBook in Las Vegas, where wagering on college football games is rising at the expense of betting on NFL games. If the Supreme Court overturns the federal law that prohibits sports betting outside Nevada, Mississippi casinos could be among the first to allow it. The New York Times

On Monday, the U.S. Supreme Court will hear arguments in a case that could bring a lot of money to Mississippi and its casinos.

The court’s eventual decision could legalize sports betting, which was banned in every state but Nevada by the federal government in 1992, the same year the first Biloxi casino opened.

The state of New Jersey is challenging the Professional and Amateur Sports Protection Act and arguing it’s unconstitutional to allow an activity in one state that is prohibited in most other states. Very limited sports betting is allowed in Delaware, Montana and Oregon under grandfather status.

“This is a states’ rights issue. This isn’t a sports issue,” said Allen Godfrey, executive director of the Mississippi Gaming Commission. “Sports betting is done legally in Nevada and it’s done illegally everywhere else,” he said.

The case is expected to begin at 9 a.m. Central Time and will last about an hour. The Supreme Court decision is expected in the spring — by June at the latest — said Sara Slane, senior vice president of public affairs at the American Gaming Association and an expert on sports betting.

A decision in favor of New Jersey would be a big opportunity for Mississippi, which is one of five states that supported New Jersey in asking the Supreme Court to hear the case.

Just as Mississippi was one of the first states to legalize casinos, it could be among the first to tap into a share of the expected billions in revenue and a big increase in jobs from sports betting. The Mississippi Legislature last year legalized fantasy sports in Mississippi and also opened the door for sports betting should it be allowed at the federal level.

Based on the legislation in place, Godfrey said it is his opinion that if the law changes at the national level, Mississippi would have the option to allow sports betting with Gaming Commission approval.

It’s hard to put a number on how much money is wagered on sports, Slane said, but the AGA and others estimate it’s at least $150 billion a year. Only 3 percent of bets are placed legally.

“Most people don’t even realize it’s illegal,” she said. “It’s part of Americana.”

Three scenarios

The questions the justices ask may give some guidance how they see the case, said Slane, who says it’s probably the most important federal case for the casino industry since the Indian Gaming Act in the late 1980s.

The premise of this case isn’t whether sports betting is good or bad, but whether the federal ban goes against the 10th amendment and states’ rights.

Slane said the court generally could respond in three ways:

▪  Uphold the ban and say it is constitutional

▪  Give an opinion with partial repeal of the law and guidance how sports betting should be regulated

▪  Declare the ban unconstitutional, allowing New Jersey to start operating sports books immediately, with other states preparing to follow quickly.

“I think everyone is very optimistic,” she said, but should the ruling go against legalizing sports betting, the AGA has a backup plan.

AGA never had a one-track strategy, focused entirely on the court, she said. The AGA also has a Congressional strategy and will be headed to Congress if necessary, she said.

“This is an exciting time for the casino gaming industry and the AGA is committed to securing this multi-billion dollar growth opportunity,” AGA Executive Director Geoff Freeman said.

It started in Mississippi

Even before New Jersey and the AGA started powering to get the ban reversed, the effort to legalize sports betting began in Biloxi, recalls Biloxi attorney Britt Singletary.

“I represented the IP Casino in an effort to legalize racebook in Mississippi in 15 years ago,” he said. He was representing the late Ralph Engelstad, owner of what was then the Imperial Palace Casino in Biloxi.

“We wanted to start that fight, try to get to sportsbook,” Singletary said. They began with racebook, he said, because the casino just takes bets on races at the tracks and keeps a percentage of the wagers. “There’s no risk to the casino at all,” he said.

“We won at the local level,” he said. But Mississippi Supreme Court reversed the decision, saying the executive director of the Gaming Commission had the discretion to decide the legality of all games in Mississippi. Then-director Paul Harvey decided against it.

Had they won, Singletary said Englestad had authorized him to sue the federal government for being in violation of the commerce clause by favoring one state over the other.

Mississippi’s Gaming Act mirrors the Nevada Act, word for word, except for one provision. At the time, Mississippi’s regulations said the outcome of all events on which wagers were made had to be decided on the premises of the casino. That provision has since been removed.

On track

What’s going to happen now if sports betting is legalized is that the majority of the states will dive in, Singletary said. “Multi-billions of dollars is going to be spreading across this country,” he said, and few states are going to let this much money pass by.

Mississippi is “absolutely ready to go,” Singletary said, because the language and law are already in place. “We don’t have to go in there and do a major reform of our bill,” he said.

Most of the large casinos on the Coast, including the Beau Rivage, IP Casino, Golden Nugget, Grand Biloxi, Hard Rock Biloxi, Boomtown Biloxi and Hollywood Gulf Coast, are already associated with racebooks in Las Vegas.

For the smaller Coast casinos that aren’t owned by a Vegas company, it gets a little more complicated, he said. Setting odds is an art, he said, and a casino “can lose the rent on a sporting event going the wrong way.”

Biloxi for decades has been known as a place to bet on sports illegally and Singletary said many people know how to connect with a bookie who operates on the Coast.

“I can place a bet tomorrow if I want to,” he said.

That will change if sports betting is legalized, he said. “It’s going to put the bookies out of business,” he said, primarily because for those placing the wager, “You know you’re going to get paid.”

How it could work

In Nevada, sports betting is allowed in casinos and now on an in-state online mobile app, where users go into casinos to load money in their account.

Mississippi and other states could expect to see new customers at the casinos, Slane said, recapturing the money spent betting illegally, generating taxes for cities and states and creating jobs.

It also could be a boost for the sports leagues such as the National Football League, which had already seen a decline in viewers since 2015, according to Forbes. A study by Nielsen Sports for the AGA shows adults who bet on the NFL watched 19 more NFL games in the 2015 season than adults who didn’t bet, and generated more than double the ratings across the major television networks.

Sports betting has already been tested, Slane said. Great Britain has allowed betting on sports for decades, and it soon could be crossing the pond.

What you need to know

What: The U.S. Supreme Court will hear arguments Monday on New Jersey’s challenge to the Professional and Amateur Sports Protection Act of 1992 that bans full sports betting in every state except Nevada.

When: The hearing begins about 9 a.m. Monday. The Supreme Court should rule next spring.

Why it’s important: Mississippi legislators already approved sports betting if it becomes legal in the U.S., and could be one of the first states to benefit