Recently, the State of Delaware released data from the first 20 days of sports wagering in the state. These numbers may provide some insight into the anticipated success of sports betting in Mississippi.

But first, let’s review what some of the experts have previously estimated gross gaming revenue (“GGR”) from sports wagering could be in the Magnolia State.

On May 15, 2018, Allen Godfrey, the Executive Director of the Mississippi Gaming Commission, made a prediction on the potential size of the Mississippi sports wagering market, saying, “This is not for the $60-100 million that may be generated. It’s for the additional benefits of having people stay at your properties.” The “additional benefits” beyond sports betting GGR to which Godfrey alluded could include additional overnight stays at Mississippi casinos, more covers in restaurants, additional customer play at slots and table games, ancillary sales and gaming tax benefits to the state and more.

In 2017, the American Gaming Association commissioned Oxford Economics to conduct a study on the potential for sports wagering in the United States. Their study concluded legalizing sports wagering in Mississippi could provide an additional $197.2 million in GGR for the state, resulting in a direct and indirect increase in employment of 2,543 people and an increase in direct and indirect income of $98.6 million.

Another 2017 study conducted by Global Market Advisors pegged the Mississippi sports wagering market as being somewhere between $13.1 million and $65.4 million. Earlier this year, Gambling Compliance Outlook estimated that GGR for the Mississippi sports betting market would be $56.1 million.

Also in 2017, Eilers & Krejcik Gaming estimated that the total US market for sports betting could be as high as $6.03 billion by 2023. If that number were to be ratably distributed among the current legal US commercial gaming jurisdictions, and using 2016 gross gaming numbers as a benchmark of relative market size, then the fair share for Mississippi (almost $2.1 billion of the total US $38.96 billion) of the $6 billion estimated market in sports wagering would be staggering–approximately $325 million.

But let’s get real. Mississippi casinos are NOT going to win $325 million in additional gross gaming revenue due to legal sports wagering. In 2017, Nevada set a record for sports wagering revenues with $248.8 million in GGR from sports betting – and that was with Nevada as essentially the only full service legal sports wagering jurisdiction in the US.

So, what is a realistic expectation for growth in GGR for Mississippi with sports betting?

Using Nevada as a historical reference, approximately 2.15% of its total GGR comes from sports betting, Mississippi could expect to see something in the neighborhood of $45 million in additional GGR from sports wagering customers.

But, early numbers from Delaware provide cause to think that number may be too conservative.

The first 20 days of full legal sports wagering in Delaware resulted in related GGR of $1,000,247. If those numbers are extrapolated to yield approximately $18.2 million in annualized Delaware sports betting GGR, the result is approximately 4.7% of the anticipated GGR for all casino gaming in Delaware for 2018.

It is also worth noting the Delaware data may skew slightly low. The 20 days from which this data was gained included relatively little sports activity – there were only two games left in the NBA finals and the NHL playoffs had recently ended, leaving most betting activity to occur only on regular season MLB games, the World Cup, and futures bets for upcoming sports (college football and NFL).

That being said, if one takes that same 4.7% and applies it to the extrapolated anticipated GGR numbers for Mississippi for 2018, the anticipated Mississippi GGR number for sports wagering alone is approximately $98 million.

Why would it be reasonable to expect that the Mississippi sports wagering numbers would be higher than Delaware’s?  A significant reason is that approximately ten times the number of casinos operate in Mississippi as compared to Delaware. For 2018, Mississippi’s GGR is on track to beat Delaware’s by approximately $1.7 billion ($2.084 billion to $382 million) (without factoring in the effects of sports wagering).

What about the sustainability of any increase in GGR from sports wagering?  There are 38 million people who live within 150 miles of Wilmington, DE, while only 5.5 million live within 150 miles of Biloxi, MS and only 4.5 million live within the same distance of Tunica County, MS. But over time, Delaware is going to experience more cannibalization of its market share from sports wagering outlets in neighboring states such as New Jersey and West Virginia.

The Mississippi sports betting market, however, is likely to be more protected from nearby competition. While only ten million people live within close driving distance of the two major Mississippi gaming markets, Mississippi will, for the immediate future and perhaps over a longer term, have a regional monopoly with respect to legal sports wagering. Approximately 21.5 million people live in the states surrounding Mississippi (LA, AR, AL, TN), and none of those states have legal sports wagering. This number does not include the populations of Georgia or nearby Northwest Florida that are also “dry” to sports betting.

So, again, what is a realistic expectation for growth in GGR for Mississippi with the addition of sports betting?

When one sifts through all the information and analyses recited above, the most reasonable expectation seems to be that provided by Allen Godfrey, the Executive Director of the Mississippi Gaming Commission—somewhere between $60 and $100 million. If we had to pick a number, we would say $75 million sounds pretty good.