Louisiana’s 51% sports betting tax hike proposal on pause as bill sponsor defers
House Bill 22 deferred by Representative Roger Wilder but increase from current tax rate of 15% still anticipated in Bayou State
Lawmakers in Louisiana have temporarily halted proceedings regarding a bill that would see the state’s sports betting tax rate hiked to 51%, matching the highest rate in the US.
The current rate of tax in Louisiana sits at 15%, higher than the national average, with operators also able to eliminate promotional deductions from tax returns.
Betting companies are able to deduct as much as $5m in promo spending over the course of a fiscal year, effectively lowering tax contributions.
During a legislative hearing on Wednesday, November 13, House Bill 22 was voluntarily deferred by its sponsor, Representative Roger Wilder.
It will now undergo amendments, after Wilder explained he recognized the differences between the sports betting landscape in the Bayou State compared to the likes of New York, Rhode Island, and New Hampshire, all of which currently levy a 51% tax rate.
Wilder also conceded that moving forward he would not push for Louisiana to implement such a high rate of tax, but made clear the current system is not one he considers to be “win-win.”
“I firmly agree with the fact our constituents in Louisiana have the opportunity to have entertainment and do as they please,” Wilder explained.
“I don’t want to deter that so we weren’t trying to harm that. But I go back to saying that currently the format is not a win-win.”
Wilder’s bill has sparked plenty of debate, with several vocal critics berating the proposal, including Jeff Ifrah, the co-founder of iDevelopment and Economic Association, who dubbed the proposed tax hike as “drastic and counterproductive” before the hearing.
“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,” Ifrah argued.
“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.”
However, House Bill 22 was backed by Representative Mike Johnson, who insisted the revenue boost to Louisiana’s coffers from higher tax could be used to offset the social services costs the state has incurred due to gambling-related harms.
One potential amendment that could be made to HB 22, which also proposes a ban on promotional spending by operators, is to match the state’s sports betting tax rate to that of the tax rate for slot machines at gas stations, which is currently 32.5%.
Over the course of the last fiscal year, operators in Louisiana paid the state $52.5m in taxes, alongside handing out $44.4m in promotions.
While state lawmakers are mulling over HB 22, the wider debate surrounding whether sports betting should be legalized in Louisiana continues to rumble on.
During Wednesday’s legislative hearing, Louisiana Progress executive director Peter Robins-Brown declared: “Now, that gambling has become widespread across the country, there are a lot of studies that are coming in and looking at the actual impacts of it.
“We’re seeing things like increases in domestic violence and increases in economic insecurity among people.”
Louisiana is currently home to seven sports betting operators, including DraftKings, ESPN Bet, and FanDuel.