A measure seeking to raise the online sports betting tax in Louisiana continues to gain traction and has just passed the House of Representatives. The bill comes as a part of a broader trend that has seen states seek higher taxes.
Louisiana Eyes a Tax Hike for Online Sports Betting
On May 20, the Louisiana House of Representatives greenlit an amended version of House Bill 639, allowing it to move forward.
Originally, the bill sought to more than double the state’s online sports betting, increasing it to a staggering 32.5%. Lawmakers, however, eventually agreed on a more modest increase that would raise the tax to 21.5% instead. This change was prompted by a strong pushback from the industry, which expressed significant concerns over the initial proposal.
Stakeholders argued that the 32.5% tax rate would hurt the industry, making it less competitive and, among other things, exposing the state to higher pressure from the unlicensed betting market.
Operators and lawmakers agreed that a 21.5% tax rate would be healthier for the industry while still generating extra funds for the government.
For context, the Pelican State’s current online sports betting tax rate is set at 15%. It should be noted that the proposed tax hike would only affect the online betting sector.
The Bill Will Change 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.
Per HB 639, Louisiana will establish the Supporting Programmes, Opportunities, Resources, and Teams Fund (SPORT Fund), which will receive a quarter (25%) of the revenue generated from mobile sports betting taxes.
For reference, the SPORT fund will support student-athletes and other sporting initiatives in Louisiana. The funding it receives will be overseen by the Board of Regents, which will distribute it among local universities’ sports departments.
In the meantime, 3% of the money will go to the Louisiana Postsecondary Inclusive Education Fund, while the remainder will go into the state revenue.
Now, the revised version of HB 639 will head to the state’s Senate for further deliberation. It would also need the governor’s signature before being signed into law.
Maryland Passed a Similar Tax Hike
Speaking of getting signed into law, Maryland just passed House Bill 352, increasing its online sports betting tax by 5% to 20%.
In the meantime, Colorado’s governor just passed House Bill 1311, which ended tax deductions that sports betting operators previously enjoyed. The extra funds generated by this measure would support the state’s Water Plan.