Louisiana may be considering a significant increase in sports betting taxes, as proposed by Rep. Roger Wilder III. The newly filed House Bill 22 would raise the state’s sports betting tax to 51% from the current 15%. This move has surprised many industry observers, as Louisiana was not seen as a state likely to implement such a substantial tax hike.
The bill would apply a fifty-one percent tax on the net gaming proceeds from sports wagering conducted within the state through online platforms or mobile applications. This proposed tax rate is on par with only two other states, New York and Vermont, which also have a 51% tax on sports betting.
Mobile sports betting was introduced in Louisiana in early 2022 and has since gained popularity in the state. Despite being the casino capital of the Southeast, Louisiana currently ranks 15th in sports betting handle. However, this position may change as more populous states like Florida and North Carolina enter the market.
If enacted, Wilder’s bill could have significant implications for sportsbook operators. It would eliminate promotional play, a key customer acquisition strategy in the industry. Additionally, the proposed legislation would not affect the pari-mutuel industry, which includes horseracing bets.
The sports betting industry was taken by surprise earlier this year when Illinois increased its sports wagering tax rates, resulting in higher taxes for major operators like DraftKings and FanDuel. This move raised speculation that other states might follow suit to generate more revenue.
While states like Michigan and New Jersey were expected to lead in raising sports betting taxes, Louisiana’s proposal has shifted the focus. The industry, which generally opposes high tax rates, may be caught off-guard by the potential tax increase in Louisiana.
It remains uncertain whether Wilder’s bill will gain enough support to pass. However, Louisiana’s advantageous position in sports betting geography, with neighboring states yet to permit mobile betting, could work in favor of the proposed tax hike. Louisiana’s move to increase sports betting taxes could set a precedent for other states and reshape the industry landscape in the future.
