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Moak returns with new online gaming bill

February 6, 2013

By SID SALTER

Despite politically crapping out last year on virtually the same piece of legislation, State Rep. Bobby Moak, D-Bogue Chitto, is rolling the dice again in the 2013 legislative session on online gaming legislation that could have a profound impact on the future of legal gaming in the state.

That’s why Moak is back with House Bill 254 in 2013 after his original online gaming bill HB 1372 died last year. The bill proposes to regulate, license and tax online gaming at 5 percent of gross revenues. The bill would restrict online gaming licenses to those companies already holding land licenses to operate in the state.

Moak wrote the legislation in reaction to a 2011 U.S. Justice Department ruling which clarified that the ban on interstate betting in the Wire Act of 1961 applied only to a “sporting event or contest” and that all other gambling operations are outside the purview of the act. According to the National Conference of State Legislatures, the DOJ decision opened the door to any form of online gaming over the provided it isn’t the so-called “sports book.”

Under the ruling, states can sell lottery tickets online and authorize online poker, roulette, blackjack and other casino games, as long as the actual betting takes place within a respective state’s boundaries, even if out-of-state credit cards are used to finance the gambling.

Normally, someone who wants to change Mississippi gaming laws would have to fight the state’s churches and the entrenched casinos. Since the inception of legal casino gaming in Mississippi in the 1990s, efforts to enact a state lottery or other major changes have met with opposition from the churches and from the big casino companies.

When Moak introduced HB 1373 during the 2012 session, religious critics of any expansion of legal gaming of any kind in Mississippi reacted. But because the bill protected them from competition from new online-only gaming companies, many of the big casino operations supported Moak’s play. Moak is a former chairman of the House Gaming Committee and knows the industry well.

Moak’s “Mississippi Lawful Internet Gaming Act” was a reaction to a 2011 U.S. Justice Department ruling that held that the Interstate Wire Act of 1961 — a federal law that has complicated efforts to legalize online gaming — was being interpreted as only outlawing sports betting. In the past, the federal Wire Act was interpreted as outlawing all forms of gambling across state lines.

Moak argued that the legislation was necessary to allow Mississippi’s existing gaming industry to have more control of its own destiny and to allow the state to regulate what will already be taking place online with or without their approval — and to tax it. The bill — which died in committee after being double-referred to Gaming and Ways and Means — included a measure to allow the state’s existing gaming licensees to offer online games of chance that are regulated and taxed by the state, but on different terms than in the bricks and mortar casinos.

Nevada has embraced new online gaming competition. New Jersey Gov. Chris Christie vetoed online gaming legislation passed in 2011 by the New Jersey Legislature and faces a Thursday deadline on a new online gaming bill. Since the Justice Department ruling, seven states (California, Delaware Hawaii, Iowa, Illinois, Mississippi, and New Jersey) have entertained legislation authorizing forms of online gaming in their states. Utah has passed legislation specifically prohibiting internet gaming. Maine has altered their gaming statute in response to the Department of Justice ruling.

Mississippi lawmakers haven’t heard the last of the online gaming issue as certain competition for the state’s existing 30 commercial casinos that had gross gaming revenue of $2.25 billion in 2012. Records released recently by the Mississippi Department of Revenue showed that gaming revenue in 2012 showed an increase of $12 million over 2011 — that after a sour national economy helped fuel a streak of four consecutive years where Mississippi gaming revenues dropped by an average of about $160 million per year.

What is certain is that opponents of all forms of legal gambling will be against online gaming and most of the entrenched traditional casino operators with bricks-and-mortar locations in the state will support it in Mississippi — just like last year. But at some point, the legislation is likely to gain traction.

Sid Salter is a syndicated columnist. Contact him at 662-325-3442 or ssalter@ur.msstate.edu.

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