Bill to Raise Tax for Louisiana Sports Betting Operators Paused

Louisiana’s debate over raising its sports betting talk appears to be at an end.

Louisiana Representative Roger Wilder proposed House Bill 22 last week, raising the state’s sports betting operator tax rate from 15% to 51%. The change was estimated to increase the state's annual tax revenue by $151 million. However, just days after its introduction, Wilder deferred the bill after an outcry from the sports betting industry.

According to Wilder, he was not fully aware of the consequences of such a massive rate hike. 

“I have some learning to do,” Wilder said of his decision to defer HB22. “I look forward to hearing the testimony from the industry, to gain a deeper insight of what the industry has with respect to their needs and their concerns on this issue.”

The sports betting and casino industries did not hesitate to express their opinions on the bill. Each pointed out that their investment in the market was based on a 15% tax rate, tripling that would lead them to reassess their presence in the middling market.

While the bill could still be considered, the speed with which it was shelved suggests that it is likely dead. Louisiana would become the latest state to struggle to increase its tax rate. 

Louisiana Could Look to Illinois for Guidance

Illinois was another state that considered raising its tax rate to 51%, but the bill failed. However, the state replaced it with a tiered tax system. The unique system would set tax rates depending on the revenue produced by each operator. That means FanDuel and DraftKings would pay the most, while sportsbooks like Fanatics and ESPN Bet would have far lower rates.

Illinois’ tiered proposal helped break down the opposition, with all operators previously presenting a united front. Smaller operators are struggling as FanDuel and DraftKings continue to dominate the market share, but a tiered tax system can help them better compete.

Time will tell if Louisiana is willing to take the same tactic.