Industry stakeholders urge Louisiana against raising sports betting tax to 51%
House Bill 22, from state representative Roger Wilder, proposes significant tax hike alongside ending sports betting promotions
Jeff Ifrah, the co-founder of iDevelopment and Economic Association, has called on Louisiana to avoid raising its sports betting tax rate to 51%.
The Bayou State launched online sports betting in January 2022 with a tax rate of 15%, which is added to by operators being able to eliminate promotional deductions.
Operators in the state can deduct up to $5m in promo spending in a fiscal year, which in effect will lower tax contributions.
However, a special legislative session convened last week looking at tax reforms, with the state set to be down over $700m next year according to the Associated Press.
House Bill 22, filed by Representative Roger Wilder last week, proposes lifting the tax rate from 15% to 51% to put Louisiana alongside New York as the commercial market with the largest tax burden.
HB22 needs a two-thirds majority in both chambers to be approved, with the legislation also proposing a ban on promotional spending by operators.
During the last fiscal year, operators in the state paid $52.2m in taxes and handed out $44.4m in promotions.
However, Ifrah claimed HB22 would be detrimental to both players and operators as he slammed the tax hike as “drastic and counterproductive.”
Ifrah said: “This measure, if passed, will make Louisiana one of the highest-taxed sports betting markets in the country, significantly undermining the competitiveness of legal operators in the state.
“Such a sharp increase would not only raise costs for operators but ultimately impact consumers, who will bear the brunt through less favorable odds and reduced promotional opportunities.”
He added: “If Louisiana seeks to increase revenues, the path forward should be to expand opportunity – not to suffocate a thriving industry that is already generating economic growth benefits.
“We urge Louisiana lawmakers to reject this misguided tax hike and instead pursue policies that simulate economic opportunity and growth.”
The tax hike would bring Louisiana in line with New York and New Hampshire, though the latter is deemed a non-competitive market with DraftKings serving as a de facto monopoly in the state.
Illinois made headlines this year after introducing a sliding tax scale from 20% to 40% based on operators’ annual GGR.
The new scale, which came into effect in July, replaced the previous 15% flat rate in the state.
Louisiana is home to seven online sports betting operators, including ESPN Bet, DraftKings, and FanDuel.