Published on: November 11, 2024, 10:16h.
Last updated on: November 11, 2024, 10:16h.
Sports betting industry analysts probably didn’t have Louisiana contemplating a significant tax increase on their 2024 agenda, but it’s potentially on the table following newly introduced legislation.
Earlier on Monday, Rep. Roger Wilder III (R-Livingston Parrish) put forth House Bill 22 (HB 22), which, if approved, would increase Louisiana’s sports betting tax to 51% from 15%.
There is hereby levied a fifty-one percent tax upon the net gaming 2 proceeds from sports wagering offered to consumers within this state pursuant to this 3 Title electronically through a website or mobile application,” according to text of the bill.
Mobile sports betting launched in Louisiana in early 2022 and has since thrived in a state that was already known as the casino capital of the Southeast. Currently, the state ranks 15th in handle since legalizing sports wagering, but this position is likely to shift as more populous states like Florida and North Carolina contribute more data.
Louisiana May Be Inspired by NY Sports Betting Tax
It’s uncertain if Wilder took cues from New York or Vermont in proposing HB 22, as those are the only other states with sports betting taxes set at 51%.
Despite criticisms from mobile sportsbook operators about New York’s tax structure, gaming companies and the state understand that New York’s position as the fourth-largest state in the country provides leverage. Louisiana lacks this population advantage.
Wilder’s proposed law could unsettle sportsbook operators in another manner. If enacted, it would revoke a previous statute that allows for promotional play — a key customer acquisition tool in the industry.
“Repeals the provision authorizing promotional play and amends the definition of ‘net gaming proceeds,’” according to the bill.
The law does not apply to Louisiana’s pari-mutuel sector, including bets on horseracing and winning wagers.
Louisiana Tax Proposal Could Surprise Industry
Earlier this year, Illinois adjusted its sports wagering tax system, transitioning to a graduated levy structure where major operators like DraftKings and FanDuel pay higher taxes than their smaller competitors.
This move resulted in these gaming companies seeing their tax rates effectively double in the state, fueling speculation in the industry that other states might raise sports betting taxes to boost revenue.
While the expectation was that Michigan or New Jersey would lead any tax increase, given their lack of political similarities with Louisiana, the industry could be caught off-guard by Wilder’s proposal.
It’s uncertain if Wilder’s bill has gained traction at this point, but it may have an advantage. Louisiana benefits from favorable sports betting geography, as none of its neighboring states currently allow mobile betting.