Schools are not always a priority for gambling revenues

Schools are not always a priority for gambling revenues

(Miss.) Although casino gambling and now sports betting are commonly used across the U.S. to benefit schools, there appears to be little interest in Mississippi to follow suit.

Casino resorts have become a major tourist draw along the state’s Gulf Coast and its northwest border since voters legalized the activity in 1992 and now, wagering on professional and college sports has also emerged as an important source of state and local tax revenue.

But only a small slice goes directly to support K-12 schools.

“It’s a common misconception,” Larry Gregory, executive director of the Mississippi Gaming and Hospitality Association, told the Clarion Ledger, last week. “If there had been talk about education becoming a major beneficiary when voters approved casinos back in the early 1990s, it didn’t make it into any of the regulations.”

Casino taxes have contributed more than $6.5 billion to the state over the past 25 years. Although schools have received hundreds of millions of dollars from gaming sources over that time, public education is not a priority of gaming revenue.

Under the state’s gambling act, casinos pay a 12 percent tax on gross revenues. From that total, about two-thirds goes to the state general fund—of which, about 19 percent goes to public education.

The remaining third is split between local governments and schools. Typically, each jurisdiction is allowed to decide what that split is. In the city of Biloxi, home to eight of the state’s biggest casino resorts—40 percent of the split goes to the city general fund; and 20 percent goes to public safety agencies; with the remaining going to local school districts.

Shane Switzer, director of business at the Biloxi School District, said they receive about $6 million a year from the tax on gross casino revenue. That represents about 10 percent of the school’s overall budget, he told the Clarion. Revenue from sports betting also added $200,000 since the state fiscal year began in July.

“In addition to the gaming revenue tax, we also receive ad valorem taxes from both land assessments and personal property assessments,” he said. Casinos pay a local fee on each slot machine, along with other use and wage taxes. Mississippi’s casinos had nearly 20,000 employees and a monthly payroll of $51 million in December 2018.

All states except Hawaii and Utah collect revenue from one of more forms of gambling–from lotteries to casinos and horse racing. According to a 2016 analysis from the Rockefeller Institute, 19 states have legalized casino operations.

During 2015 alone, state and local governments raised $27.7 billion from gambling activities, about two-thirds from lotteries.

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