Louisiana Sports Betting Takes First Legislative Step

Louisiana Sports Betting Takes First Legislative Step article feature image

Photo by David LEFRANC/Gamma-Rapho via Getty Images. Pictured: Louisiana Capitol

Louisiana lawmakers advanced a sports betting tax bill without opposition Wednesday, the first step in the lengthy legislative process to bring legal online and potentially retail wagering to most Louisiana parishes.

The House Ways and Means Committee advanced a bill that would tax retail and online sportsbooks 10 and 18 percent gross gaming revenue, respectively. House sponsor Todd Stefanski said during Wednesday’s committee meeting that the steeper online rate, which would be among the highest online sports betting taxes in the nation, was designed to encourage in-person foot traffic to brick-and-mortar gaming facilities.

The tax bill’s first step comes more than five months after voters in the vast majority of Louisiana parishes approved legal sports betting. Taxing legislation, which by state law must originate in the House of Representatives, is just one piece of what will likely be a months-long legislative process needed for legal wagering to begin in Louisiana.

“I want to get this process started because I know how difficult it is to pass a tax and how difficult sports betting is for some members, depending on what parish (you represent),” Stefanski said. “I promise I will not move this on to the floor until I have an opportunity for everyone to get their input in.”

Regulation Details

The House tax bill complements a Senate regulatory proposal that would allow online sportsbook licenses for Louisiana’s 20 commercial gaming facilities as well as the state lottery and retail offerings for virtually every lottery and liquor retailer in the state.

Each gaming facility could open two online sportsbooks, or “skins,” meaning there could be as many as 41 total mobile sports betting options between the commercial gaming establishments as well as one skin for the state lottery.

Caesars operates several Louisiana casinos, including that state’s lone land-based casino, Harrah’s New Orleans. It would likely use at least one of its skins for its William Hill brand.

Other leading gaming operators already partnered with sportsbooks in other states including Penn National (Barstool Sportsbook), Boyd Gaming (B Connected), Churchill Downs (TwinSpires) and Golden Nugget own Louisiana gaming facilities. These brands and many other top names such as DraftKings, FanDuel, PointsBet and BetMGM will likely enter the market if the tax and regulatory bills pass.

The gaming facilities would pay a $250,000 initial application fee, plus a $500,000 “franchise fee” that would last for five years.

Other issues

Voters in 55 of Louisiana’s 64 parishes approved legal wagering via a 2020 ballot measure, but the referendum didn’t specify many key taxation and regulatory questions elected officials are looking to resolve in this year’s legislative session. The 2020 authorization prohibits any type of online or retail sports betting in the nine parishes that rejected wagering, but it remains to be seen which facilities (beyond the aforementioned gaming entities) will be able to take bets throughout the rest of the state.

The Senate regulatory bill sponsored by Senate President Patrick Page Cortes and supported by House Speaker Clay Schexnayder would also be the first to permit thousands of retail kiosks at hundreds of state lottery retailers as well as bars and restaurants with liquor licenses. Louisiana is among a handful of states that permit video poker terminals at bars, and Stefanski said Wednesday sports betting kiosks would likewise be confined to certain areas of the establishments like the existing gaming machines are now.

“We see this as a way for local businesses, bars and restaurants to be able to participate in this program,” Stefanski said.

Sen. Cameron Henry has introduced a competing bill that would allow the 20 aforementioned gaming facilities three mobile skins apiece but would not allow the lottery to open an online sportsbook or betting kiosks at its retail vendors. The bill could be more palatable in a state where gaming remains politically controversial, but it appears House and Senate leadership are already backing the more expansive retail betting proposal.

Next Steps

Wednesday’s vote of confidence gives the taxation bill firm footing heading to further debate, but as Stefanski said during the committee hearing, it could be a while before the bill receives passage on the House floor.

In the meantime, the Senate will have to take up the contrasting visions for implementing the nascent sports betting industry. Voters in the vast majority of parishes, including the dozen most populated, approved legal wagering in their home municipality, but it remains to be seen how or when lawmakers will implement the critical follow-up legislation.

Lottery retailer and liquor license holder access will likely be a key contention point. So too could the rights to take bets for the actual video lottery terminal operators themselves, who helped stall a 2018 daily fantasy implementation bill.

Those political obstacles remain, but the early endorsement from the state’s political heavyweights, plus the warm initial reception for the tax bill, are positive early signs Louisiana’s sports betting bill passes before the 2021 session ends in June.

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