Louisiana Senate Approves Bill to Raise Tax Rate for Sportsbooks

The Bayou State is about to achieve something many other states have failed at.

The Louisiana Senate has approved HB 639 by a vote of 35-3 on Sunday. The bill proposes to raise the tax rate for sports betting operators from 15% to 21.5%. The House approved the bill last month, meaning it will now head to the Governor’s office for final approval.

The bill marks a massive victory for the state. While lawmakers originally proposed doubling the tax rate, a smaller increase was negotiated as the bill was considered. 

Once the Governor signs HB 639 into law, it will make Louisiana one of the few states to raise its tax rate on sportsbook operators successfully. Several other markets have proposed tax hikes of varying size, but they have been defeated in the face of heavy opposition from the industry.

On top of raising the tax rate, the bill will also create the Supporting Programs, Opportunities, Resources, and Teams (SPORT) Fund. It will use some of the additional tax revenue being created to support the athletic departments of the state’s Division 1 NCAA schools. 

The additional revenue will be used to help create more scholarships, purchase new equipment, and fund other projects to help schools improve their athletic programs.

Tension in Industry Growing Over Taxes

Louisiana’s tax hike on the sports betting industry comes at a contentious time. Lawmakers across the country have been pushing hard to raise their rates and increase tax revenue, prompting sportsbook operators to threaten legal action.

Those tensions have begun to spill over in Illinois, which recently passed a “per-bet tax”, which will make a significant cut into operator revenue. Sportsbooks in the state have threatened legal action and are expected to begin adding surcharges and offering fewer bonuses to offset the losses incurred by the tax.

If the Illinois sports betting market begins to shrink, it could lead other states to look to Louisiana for a road map to increasing tax revenue. The state’s ability to start negotiations with a significant hike allowed them to pass a smaller increase without much pushback from operators.