Mississippi State Representative Bobby Moak has introduced a bill that would legalize and regulate internet gaming in the state. He has been behind bills the past three years that failed before any vote.
The bill is known as the Mississippi Lawful Internet Gaming Act of 2015. This is the same title as previous bills, just with a different year. Much of the language is the same. In fact, an apparent typo uses 2014 in the title of the bill on page two.
Basic Terms of Mississippi Online Gaming Bill
All games that are legal in Mississippi casinos would be available at state regulated sites. Players would be required to be 21 years of age or older. Two forms of ID must be presented before playing. These may be submitted online.
Players would be required to be in Mississippi at the time of action. Standard geolocation software would be used to satisfy this requirement. All equipment related to online gaming must be located in the state.
Players would be able to deposit by cash, check, money order, wire, and debit or credit cards. Cash and checks would be available for withdrawals. The Mississippi Gaming Commission could approve more banking options.
Sites would not be permitted to offer credit. Any player on the brick-and-mortar exclusion list would also be unable to participate in online gaming. Internet cafes would be illegal unless a gaming license was held by the premises.
The gaming commission would be permitted to enter into interstate and intrastate liquidity sharing agreements.
Affiliates that receive revenue share would be required to apply for a significant vendors license, which is similar to that of software providers.
ISPs can be required to block offshore sites and can be liable if they knowingly allow access to them. ISPs may also be ordered by a court to terminate accounts of customers that access illegal offshore sites through their services.
The Mississippi Gaming Commission may pursue domain names that accept Mississippi players. The state will deliver civil forfeiture action via email and postal, as well as through a post on the gaming website to satisfy the service of process.
If the domain cannot be seized, a restraining order could be issued to prevent access to Mississippi residents. A defendant can petition the court to vacate the action if the site is no longer involved in illegal internet gambling.
Player accounts that are dormant for one year are forfeited. Half of the dormant account funds goes to the state. The licensee keeps the other half, but it must be used to fund the promotion of Mississippi tourism. Sites must attempt to contact the player before seizing the funds.
Licensing Fees and Taxes
Licenses will cost at least $200,000 initially. Renewals will be at least $100,000. At least $100,000 of the initial license and $50,000 of the renewals must go towards enforcement against illegal sites. Licenses may be active for one to five years, depending on the policy set by the gaming commission.
There is also a five percent tax on gross gaming revenue planned in this bill. Bonuses, VIP programs, promotions, and comps may be deducted from gaming win before taxes are determined. The Mississippi Gaming Commission would receive 75 percent of this, while the state’s general fund receives the remainder.
Penalties for Illegal Online Gaming
There are penalties for those that violate the Mississippi Lawful Internet Gaming Act of 2015. One who “knowingly causes, engages in or permits” unlawful internet gambling could receive up to 90 days in jail and a $10,000 fine. This has been interpreted to include any player that gives action to an offshore site. This section also includes asset forfeitures related to profits from online gaming.
Managers, operators and owners would face up to 10 years in jail and a fine of up to $100,000. The companies face fines up to $250,000. Forfeitures are also permitted under this section.
Gaming Commission Given Latitude
The gaming commission is given the ability to write regulations that it deems fit. This may include a bad actor clause as one is not included in the current language of the bill. There are many potential licensing requirements that are left up to regulators.
There are two problematic portions of this bill. Punishing players should not be a goal of any sort of regulation. Assuming “engages in” applies to players, this bill includes such language. Go after the sites providing the service, and the payment processing companies, but throwing players in jail and seizing their assets is a misguided choice.
The language in this bill that forces ISPs to act like the police could create opposition in the communications industry. This will be more red tape these companies will not want.
It is obvious that an ISP would be required to follow a court order. Placing that language in the bill and adding phrases like “knowingly” could be perceived as placing enforcement directly on the internet service providers. There will be enough opposition to this bill without having ISPs against it. It isn’t their job to police the Internet.
Other than these two points, this bill is what most players and sites should be able to get behind. It is a great idea to leave much of the decision making to regulators. This would help move the process faster.
The bill may be found here.
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