Louisiana currently levies a 15% GGR tax on online sports betting licensees. Should Wilder’s HB22 pass it would bring the state’s tax to the joint-highest level in the US alongside New York. It represents a 240% increase on the current tax rate.

In addition, the bill aims to put a halt to operators offering promotional credits to players. Currently promotional play is permitted, and credits can be deducted from Louisiana licensees’ tax calculations. Operators handed out $44.4 million in promo credits during the state’s 2023-24 fiscal year, ending 30 June 2024.

Filed yesterday (10 November), HB22 next moves to the Ways and Means Committee. Wilder currently sits on that committee in the House. It requires a two-third majority in the House and Senate to pass.

Early industry reaction is predictably negative. “There’s only so many times you can go to the golden goose before you kill the goose, and this is one of those time when you’re going to kill the goose,” said Brendan Bussmann of B Global Advisors on the wake of Wilder’s bill. 

“It comes back to the industry having to educate legislators on sports betting, and how misnomers in sports betting continue to drive a wedge in reality.”

Wilder’s bill was filed during a special legislative session – Louisiana’s third of the year – in which Governor Jeff Landry is backing a sweeping tax reform package to plug an estimated $700 million hole in the state budget. 

Landry is also backing a reform of the state tax code, arguing in favour of flat corporate and income tax rates. 

Opening the session he told lawmakers: “This tax code is bloated, this tax code is broken, this tax code is incredibly out-of-date and, this tax code is holding back our state.”

After Illinois, does Louisiana herald more pain for US sportsbooks?

Wilder’s proposal to vastly increase Louisiana’s sports betting tax marks the latest attempt by lawmakers to generate more revenue from the vertical. 

Illinois was arguably the nadir – so far – with a tiered tax system implemented in May that hiked a 15% GGR tax for all operators to 20% for the lowest earners, and 40% for the biggest in the market. This followed Ohio doubling its sports betting tax rate to 20% of GGR from January 2024.

A similar attempt in New Jersey currently appears stalled. Senator Jon McKeon’s SB3064 proposed doubling the Garden State’s tax rate to 30% of GGR and was formally introduced April, though has not progressed since.

The industry is vociferously opposed to these increases, warning that it ultimately undermines the legal industry to the benefit of illegal competitors. 

More to follow…