New Louisiana Bill Proposes Smaller Tax Hike for Sportsbooks

The Bayou State is taking another stab at raising its sports betting tax rate.

The Louisiana House has approved revised House Bill 639, which proposes raising the tax rate for sports betting operators. The original version of the bill proposed a massive hike, raising it from 15% to 32.5%. The revised proposal contains a smaller rate hike of 21.5%.

While HB 639 initially received some support, it dwindled after the industry's pushback began. Sportsbooks promised to offer fewer promotions and watered-down odds if the rate was raised to 32.5%, which could shrink the state’s thriving market.

The House hopes a smaller hike will be more palatable for operators, allowing the state to increase tax revenue without hurting its sports betting market. The goal is to generate funds to support the state’s SPORT program, which promotes local college athletic programs. 

The proposed tax rate change is limited to online operators only. That means retail operators would not be affected. 

Are Smaller Tax Hikes the Answer?

The country has seen many bills proposes massive tax hikes pop up over the last few years. Many lawmakers feel that sportsbooks aren’t paying their fair share, especially considering the spike in problem gambling. However, a powerful pushback from the industry has led to those bills failing.

While some states have abandoned the effort to raise taxes, some have had success enacting smaller increases. Maryland recently failed an attempt to double its rate for operators, but successfully passed an increase of 5%. While this is a smaller hike, it is projected to bring a significant bump to the state’s tax revenue. 

How Louisiana sportsbooks respond to the new proposal could likely influence how other states approach tax increases on the industry going forward.