Louisiana House Approves Reduced Sports Betting Tax Hike
The Louisiana House of Representatives has recently taken a significant step in the realm of sports betting by approving a bill aimed at increasing the tax rate on sports wagers. While initially proposed at a hefty 32.5% by Representative Neil Riser through HB 639, extensive discussions led to a revised tax rate of 21.5%. This amendment represents a moderate increase from the existing 15% rate, highlighting the need for fiscal balance in the state’s burgeoning gaming sector.
The bill saw a decisive vote of 73-15, surpassing the required threshold of 70 votes. It will now move to the Senate for further deliberation, with an eye towards implementation at the beginning of the coming year.
### Funding Allocation for College Athletics
A notable feature of this bill is the allocation of tax revenue to support collegiate athletics in Louisiana. The proposed legislation earmarks 25% of the tax revenue for a newly established fund named Supporting Programs, Opportunities, Resources, and Teams (SPORT Fund). This initiative reflects an increasing recognition of the financial needs of Louisiana’s NCAA college athletes.
Representative Riser emphasized the urgency for additional resources, stating, “The need is so high. When you start talking about the SEC, talking about any level of athletics right now, it’s changed so dramatically.” Currently, 63% of tax revenues contribute to the state’s general fund, which will decrease to 34% under the new proposal. The allocation for early childhood education remains unchanged at 25%, while funding for problem gambling initiatives will see a slight increase from 2% to 3%. The remaining 3% will support an inclusive education fund.
With Louisiana collecting $65 million in tax revenue last year, a tax increase to 21.5% could potentially add an estimated $30 million to state coffers.
### The Progressive Growth of Louisiana Sports Betting
Since its inception in 2021, Louisiana’s sports betting market has exhibited remarkable year-on-year growth.
| Year | Betting Handle | Gross Gaming Revenue (GGR) | Tax Revenue Collected |
|——-|————————-|—————————–|———————–|
| 2021 | ~$39 million (Nov–Dec) | ~$6.7 million | ~$1.3 million |
| 2022 | ~$2.34 billion | ~$228 million | ~$34 million |
| 2023 | ~$2.91 billion | ~$367 million | ~$32.6 million |
| 2024* | ~$3.7 billion | ~$467 million | ~$65 million |
*Projected figures
The introduction of major sportsbooks, such as ESPN Bet and bet365, has significantly increased engagement within the state, culminating in a record monthly handle of $413.5 million in November. The initial months of this year have continued this upward trend, with over $1 billion wagered. However, March Madness outcomes led to a reduced hold rate, generating $31 million in GGR for the month, compared to over $50 million in January and February.
### National Trends in Sports Betting Taxation
Louisiana is not alone in pursuing increased taxation on sports betting as a means for revenue generation. Maryland recently signed a bill that raises its sports betting tax rate from 15% to 20%, moderated from an original proposal to double the tax. Similarly, Ohio raised its tax rate from 10% to 20%, observing a slight revenue dip amongst betting companies but ultimately generating more funds for the state.
As Louisiana considers the passing of this bill, stakeholders hope that the current trajectory of growth will not only continue but expand, ensuring sustained economic benefits for the state and its communities.
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#### Author Profile
Adam Roarty is a seasoned writer with extensive expertise in the gambling industry. With a professional background that includes content creation and editorial roles at top platforms such as Oddschecker, CoinTelegraph, and Gambling Industry News, Adam brings a profound knowledge of sports betting and online gambling trends. His insights are grounded in years of dedicated research and firsthand experience.
