Louisiana tables sports betting tax hike; would be in line with New York

Article by : Charles Perrin Nov 12, 2024

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Louisiana is angling to ramp up the level of taxes that sports betting operators will need to pay.

Earlier this week, Republican Representative Roger Wilder took the opportunity from the state’s special session to table the HB22 bill, proposing the gross gaming tax (GGR) should be lifted to 51%.

Currently, Louisiana passes a 15% GGR tax on online sports betting licenses, but the initiative would put the state on a level footing with New York.

Apart from shaking up the GGR tax rates, the bill has determined that operators shouldn’t offer promotional credits to players.

As things stand, promotional play is permitted, and during the state’s 2023-24 fiscal year, over $44 million was handed out by operators in promo credits.

HB22 is now in the hands of the Ways and Means Committee, and it needs a two-thirds majority in the House and Senate to be approved and written into law.

Perhaps unsurprisingly, it has left industry experts baffled about the bill’s purpose.

Following the tabling of the bill by Wilder, Brendan Bussmann of B Global Advisors said: “There’s only so many times you can go to the golden goose before you kill the goose and this is one of those times when you’re going to kill the goose.

“It comes back to the industry having to educate legislators on sports betting and how misnomers in sports betting continue to drive a wedge in reality.”

Other Louisiana legislators, including Jeff Landry, are throwing their weight behind more sweeping tax reforms, and admitted during the state session that the current tax code is “bloated” and “outdated”.

Louisiana isn’t the only state that has been trying to address the sports betting tax situation.

Illinois brought in a new tiered tax system in May, raising the 15% GGR tax to 20% for the lowest earners and to 40% for the wealthiest.

Ohio, meanwhile, went further and doubled the sports betting tax rate from 20% to 40% in January this year.

It is also thought that the new suggested tax rate in Louisiana would help to plug a supposed $700 million black hole in the state’s budget.

Drastic tax rate hikes are never popular with sports betting operators, certainly in terms of the tax burden placed. It could be a painful road ahead for those working in Louisiana.