Mississippi Online Gambling Bill Details

by John Mehaffey on January 22, 2013

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    Mississippi House Bill number 254 was introduced by State Representative Bobby Moak last week.  The bill is named the Mississippi Lawful Internet Gaming Act of 2013.  The bill is similar to last year’s version of this bill.  It would legalize all forms of games legal within the casinos in Mississippi.  This includes poker, slots, video poker and table games.

    The only companies that would qualify for a license are the companies that own and operate the 30 Mississippi casinos.  The games would only be available to players inside the state’s borders to players 21 years of age or older that can prove their identity and their physical address.  Players would be able to create the account online.  They would be forced to agree to the terms and conditions of the website and would have to provide two forms of identification to play.  This may all be done electronically.

    Players excluded from casinos, either voluntarily or banned, would not be allowed to participate in online poker.  Employees would be forbidden from playing at their company’s online casino or poker room but would be able to play at online casinos that did not employ them.

    Deposit and Withdrawal Options

    Many deposit options would be allowed.  These include check, money order, wire transfer, echeck, ewallet, debit cards and credit cards.  Cash could also be deposited at the host casino’s cage.  These options are all available for withdrawal as well.  Credit would not be available to players.  The funds must be in the player’s account before placing a wager.

    Inactivity Fees

    One interesting addition to this bill that I have not seen in previous state bills is an inactivity fee.  Not only is it allowed, it is required.  Any player that does not log into their account for one year forfeits their account’s funds.  The casino must make attempts to reach the player but if the player fails to respond the money is lost.  The funds are split between the Mississippi Gaming Commission Fund and the host casino.  The host casino must use this money to attract tourism to the state.

    Licensing Requirements

    There would be several requirements licensees must follow to offer online gambling.  They must pay a $200,000 application fee.  This includes a $100,000 deposit.  The companies must submit their officers and key employees through a suitability process.  They must also submit their software to testing.  Licensees must also submit accounting controls, job descriptions, age and location verification systems, procedure for closed and dormant accounts, member authorization, movement of in play funds, transaction logs and security protocols.

    Employees would be required to receive a license.  The process would be similar to receiving a brick and mortar employee’s license in Mississippi.

    Companies that are approved must then pay a licensing fee of $200,000 each year.  Half of this money goes to the Mississippi Gaming Commission Fund to battle internet crime, while the other half goes to the state’s general fund.  The licensees would then pay a 5% tax on their gross interactive gaming revenue to the state each month.  Of that 5% tax, 3.75% goes towards Mississippi Gaming Commission fund and 1.25% goes to general fund.  Bonuses, VIP payments, comps and other promotions would not be taxed.

    Illegal Online Gambling Enforcement

    Stiff penalties are also in the bill for companies that continue to offer illegal internet gambling in the state.  Any person convicted of offering illegal online gambling in Mississippi would face fines of up to $100,000 and up to ten years in the state penitentiary.  Companies face fines of up to $250,000.  All assets related to the illegal business would be subject to forfeiture.  This includes the servers, domain names, software and all cash that could be linked to the illegal online gambling.

    Internet cafes that based their sole business on allowing access to online casinos would be declared illegal.  There would also be penalties for people and companies that created cheating software or modified systems to allow cheating.  Individuals found guilty of manipulating games would be faced with a fine of up to $50,000 and companies would be fined up to $200,000.  The offender’s licenses would also be revoked.

    State Could Seize Domains

    Section 5 of this bill would allow Mississippi to seize domain names of companies that they allege are illegally operating in the state.  If the accused site is operating on a domain that is not within the jurisdiction of Mississippi authorities then the state would be allowed to order internet service providers (ISP) to block the alleged offending site.

    Internet Service Provider Laws

    ISPs would be allowed to be proactive.  If a known rogue site is accessible through their network then they would be allowed to block the illegally operating online casino.  They could also block their customers that attempt to circumvent those filters that block the site.  The ISPs could also be compelled to ban illegally operating sites and players that attempt to bypass blocks that prevent access.

    ISPs receive a safe haven from prosecution for not blocking sites they have not been compelled to block.  They also receive safe havens from wrongly blocking players or websites as long as their intentions were to follow the law.

    Absent Clauses

    There are two noticeably absent items from this bill.  One is a bad actor clause.  This would block companies that once accepted Americans and Mississippians after the Unlawful Internet Gambling Enforcement Act went into effect.  New Jersey also left this clause out and it opened the door for PokerStars to buy one of their ailing Atlantic City casinos.  This could eventually lead to PokerStars receiving an interactive gaming license in New Jersey and potentially elsewhere.

    The other absent clause is guidance as to whether interstate online poker would be allowed.  The bill does not mention either way as to whether Mississippi online poker rooms could network with regulated out of state online poker rooms.  Considering several Nevada gaming companies, including Caesars Entertainment, MGM Resorts and Boyd Gaming operate in Mississippi, this could be important to clarify.  This is especially true since those online poker rooms would likely already be operating in Nevada by the time this bill would pass and go into law.

    Still a Long Road Ahead for Bill

    There is no news as to whether the casinos are for or against this bill.  Considering that many of the casinos are owned by Nevada companies already going through the interactive gaming process there they must be for expansion into Mississippi.

    While Mississippi was one of the first casino states, there is still a conservative base in the state’s legislature.  This bill likely has a long road ahead of it and the bill may change as it progresses through the legal process.

     

     

     

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