Louisiana on the Verge of Approving Online Betting Tax Hike

Louisiana’s mulled online betting tax hike has inched closer to reality and is one signature away from being signed into law. If the measure gets approved, Louisiana would join a growing number of states implementing similar bills.

The Tax Hike Inches Closer to Reality

An amended version of Louisiana’s House Bill 639 gained traction last month, passing the House of Representatives and heading to the Senate. A few weeks later, the Louisiana Senate likewise approved the measure which would raise the state’s tax on online betting.

HB 639, which is the brainchild of Rep. Neil Riser, passed the Senate with bipartisan approval which resulted in a 35-3 vote. As a result, it is now heading to Governor Jeff Landry’s desk for a final signature. Once signed, it would raise the state’s online sports betting tax from 15% to 21.5%.

As mentioned, the current HB 639 represents an amended version of an earlier measure that sought to raise the state’s tax rate on online bets to 32.5%. Subsequent negotiations with licensed industry stakeholders, however, led to a revised version of the bill that introduced the lower tax hike instead.

Stakeholders argued that the 32.5% tax rate would have hurt the industry, making it less competitive and potentially exposing the state’s gaming sector to higher pressure from the unlicensed betting market.

HB 639 to Revise How the Money Is Allocated

In addition to raising Louisiana’s online sports betting tax, HB 639 would also change how the tax proceeds are allocated. Among other things, it will establish the Supporting Programmes, Opportunities, Resources, and Teams Fund (SPORT Fund), which will receive 25% of the tax revenue. The SPORT Fund will be overseen by a Board of Regents and will support a variety of college sports initiatives in the Pelican State.

Another 3% of the tax proceeds will be allocated to the Louisiana Postsecondary Inclusive Education Fund. The rest will fuel the state revenue.

Louisiana’s mulled tax hike on online sports betting is consistent with a broader trend that has seen multiple US jurisdictions adopt similar measures. These include Maryland, which increased its tax by 5%, Illinois, which introduced a new tiered fee structure for sportsbooks, and Colorado, which ended promo deductions for sportsbooks.