Mississippi Casino Revenue Soars in First Month of Legal Sports Betting

Mississippi Casino Revenue Soars in First Month of Legal Sports Betting

Mississippi’s casino market posted a sharp revenue increase in August, the first month in which legal sports betting was launched in the state. Overall, gamblers lost a combined $181 million statewide, with that figure up by 7.5% compared to the $168 million reported for August 2017.

Accounting for much of the gains was the Magnolia State’s 12 coastal casinos which saw their business spike by 10% to $108 million last month, while year-on-year growth was more moderate for the market’s 16 river casinos which noted a 4% improvement in their numbers to $73 million versus last year.

A Tale of Two Markets

In 2017, Mississippi’s casino market generated $2.08 billion in revenue, down by 2% year-on-year, but still making it the nation’s 7th largest casino market overall. Last year also ended two consecutive years of growth (2015, 2016) for the beleaguered industry which had previously seen its revenues contract for seven years straight years since reaching a peak of $2.89 billion in 2007.

The fortune’s of Mississippi’s coastal and river casinos, however, stand in direct contrast to one another. While coastal casinos were once again in positive territory in 2017 and boasted four consecutive years of year-on-year growth, river casinos, on the other hand, went in the opposite direction and have now seen their revenues fall in every year but one since 2006.

This year there are signs that the market may finally be stabilizing, though, with revenue currently up by almost 1% over the past 12 months. While revenue was either flat or below par over the first three months of the year, April (+5%) and May (+7%) both posted year-on-year gains before June (-3%) and July (-0.7%) dampened the numbers. As mentioned, the market subsequently returned +7.5% year-on-year growth in August, with one important factor helping to positively tip the balance once more, albeit initially in a small way, being the expansion of the state’s gambling market that saw legal sports betting launched last month.

Legal Sports Betting

On August 1st, two MGM Resorts owned operations, the Gold Strike Casino and Beau Rivage Casino, started accepting sports wagers. Nevertheless, other casinos such as Penn National Gaming and Boyd Gaming didn’t launch their own offerings until later in the month, while others only went live in September, including Golden Moon Hotel & Casino; Harlow’s Casino Resort & Spa; Riverwalk Casino Hotel; and Golden Nugget Biloxi. In total, 20 state casinos have now started offering sports betting products.

August’s sports revenue results should therefore be seen as not reflecting a true picture of the nascent industry, with a more realistic level expected to be seen starting September as full-month contributions are made from an expanded number of casinos. Next month is also when the football season starts to pick up its pace.

That said, the segment still generated $6.27 million in wagers, of which baseball ($3.3m) attracted the most interest, followed by sports parlay cards ($1.4m), football ($1.3m), ‘other’ sports ($154k), and finally basketball ($97k). A respectable 10.3% hold then saw Mississippi’s sportsbooks claim $645k from the amount, of which the state received $77k by way of taxes, according to the Mississippi Gaming Commission.

Louisiana Concerned

Last year, Mississippi was one of only four casino states to post year-on-year revenue declines, while nearby Louisiana was the country’s fourth biggest gambling market and saw its business grow by 0.93% to $2.56 billion.

Mississippi’s decision to launch sports betting ahead of its western neighbor has therefore provided it with a means to tap into a valuable source of extra income at the expense of its competition. While initial estimates suggest Mississippi will only earn an additional $10 million in taxes each year from the industry, the product is being seen as a valuable tool capable of drawing more customers into state casinos, resulting in a greater spend across their other games and services.

This has resulted in some Louisiana lawmakers urging that their state follows suit, but as of yet their appears to be little appetite for doing so, leading State Senator Danny Martiny (R-Metairie) to comment:

“But as usual we’re going to be two-years behind everyone else. Even Mississippi is way ahead of us on this. So in our quest to be number 50 in everything, here’s another one.”