Louisiana Lawmakers to Consider Sports Betting Tax Hike

The Bayou State is the latest sports betting market to propose a significant tax hike on operators.

Louisiana Rep. Neil Riser introduced HB 639 into the state House in April. The bill would raise the tax rate from 15% to 32.5%, making Louisiana one of the most expensive markets in the region. It would also create the Supporting Programs, Opportunities, Resources, and Teams Fund (SPORT Fund) to help support college athletes at the state’s Division 1 colleges. 

If passed, sports betting operators would be taxed the same amount as the state’s video poker industry.

Bill Clears First Hurdle With Ease

HB 639 easily passed its first hurdle when it passed the House Appropriations Committee by a vote of 20-1. The enthusiastic support shows the bill has strong momentum in its early stages. Many supporters argue that the state deserves more, given the market’s success, which justifies this hefty tax hike.

SPORT Fund Has Strong Support

Several lawmakers have also been vocal in supporting the proposed SPORT Fund. While LSU has plenty of financial support, the 10 other D-1 schools require additional funding. The NCAA’s new rules around the transfer portal and NIL are making it hard for many schools to compete, but the tax revenue from HB 639 could address that.

The bill is estimated to send $31 million annually to the SPORT Fund. The money would be split equally between the 11 schools, including LSU. 

The question will be how the public will feel about the move. While Louisiana sports are a big deal to residents, the state could use the funding in other areas, including education.

Will Louisiana Fare Better Than Other Markets?

The list of states that have successfully raised their operator tax rate is short. Many other markets have proposed large hikes, but opposition from the industry swayed public support, leading to those bills failing. 

The early success of HB 639 is a great sign, but the opposition is only beginning. Expect to see sportsbooks start going directly to bettors to explain the impact of a tax hike, which would lead to watered-down odds and fewer bonuses. There will also be pushback from lawmakers who support the industry, which could lead to closer votes as the bill continues to advance.

There is a chance Rep. Riser used the massive hike as a starting point for negotiations. That could lead to a smaller hike, which would still significantly raise tax revenue.