Louisiana Halts Ambitious Bill to Raise Online Sports Betting Tax to 51%

In Louisiana, lawmakers have put on hold a major bill that aimed to jack up the tax rate on online sports betting. 

Proposed 51% Tax Increase Paused as Rep. Wilder Seeks More Insights

Rep. Roger Wilder, R-Denham Springs, put forward House Bill 22. This bill wanted to bump the tax rate from 15% to a whopping 51%. Such a hike would put Louisiana in the same league as states like New York and Vermont, which have the highest sports betting taxes in the country. The bill was part of a bigger plan to overhaul the tax code. Governor Jeff Landry backed this plan to make up for money lost due to planned cuts in state income tax.

The Legislative Fiscal Office estimated that this tax increase would have an impact on state revenues raising them by $151 million each year. But at the recent House Ways and Means Committee meeting, Rep. Wilder asked to put off the bill. He said he needed more time to get a handle on the industry’s ins and outs and to listen to what stakeholders had to say, reported the Louisiana Illuminator. This puts the bill on pause for now. It is not likely to come back up during the current special legislative session, which wraps up on November 25.

People in the industry raised big concerns about the bill. Samir Moad, a representative for Caesar‘s operations in New Orleans, stressed that such a big jump could stop new money from coming into Louisiana. He pointed to the company’s backing of Caesar’s Superdome as an example of financial choices that depended on the current 15% tax rate. Moad said that a tax rise to 51% might have stopped such commitments.

Louisiana Progress and Louisiana Family Forum United to Support Controversial Tax Hike Bill

The bill got support from unlikely political friends like the forward-thinking group Louisiana Progress and the right-wing religious group Louisiana Family Forum. House Speaker Pro Tempore Rep. Mike Johnson, R-Pineville, also backed it. He said the money from this tax hike could help the state deal with the social costs linked to gambling addiction. Johnson stressed the idea that industries that cause public health problems should help pay to fix these issues.

Right now, Louisiana’s online sports betting market sees yearly bets of around $3 billion, which results in revenues between $250 million and $300 million for operators. The state gets about $54 million in taxes with the system in place now. Had HB 22 passed, the expected tax collection for the 2023-24 fiscal year would have jumped to $182.7 million, a big increase from the current numbers.

However, experts doubted that the state could keep up such a high tax rate due to its population size. New York, with its big market, kept its 51% rate despite people complaining. But Louisiana’s smaller size makes people wonder if this policy can work.