Louisiana Lawmakers Propose Increase in Free Bets and Promotional Play

House Bill 473, pre-filed by Republican Rep. John “Big John” Illg Jr. and Democratic Rep. Steven Jackson, proposes to increase the amount of free bets and promotional play that Louisiana’s online sportsbook operators can deduct from their taxable revenue. If approved, the increase would raise the limit to $10 million annually, potentially reducing their overall tax burden.

While the rationale behind this move remains unclear, Louisiana’s current tax rates for retail and online sports betting are relatively standard at 10% and 15%, respectively. The state had previously considered lowering promotional deduction limits in 2022 but opted against it. However, neighboring Mississippi’s potential legalization of statewide mobile sports wagering could impact Louisiana’s market.

Moreover, despite Louisiana allowing up to 41 online sports betting brands, only nine are currently operational. This, combined with the state’s modest commercial gaming revenue growth in 2023, highlights potential challenges within the industry.

House Bill 473, initially referred to the House of Representatives’ Committee for the Administration of Criminal Justice, awaits further action. Louisiana lawmakers have until June 3 to address sports betting legislation during the regular session.

Notably, Louisiana has seen significant growth in mobile sports betting since July, with operators deducting $28.3 million in promotions during this period. This has resulted in $211.1 million in net proceeds and $29.3 million in taxes for the state. However, the reporting of promotional deductions can vary, leading to fluctuations in tax revenue from month to month. For instance, in January, deductions totaled almost $13.8 million ($5.3 million in taxes), while December saw deductions of only $681,309 (tax revenue reaching $7.2 million).

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Louisiana Sports Betting Timeline

  • June 2021: Louisiana Governor John Bel Edwards signs three bills into law, including HB697, which sets the taxation framework for betting revenue in the state. Additional legislation allows for the eventual launch of up to 40 Louisiana betting apps.
  • Aug. 23, 2021: Emergency rules for sports betting legalization, including employee and vendor requirements for sports betting permits, come into effect. The rules also outline duties for licensees and operators while prohibiting gambling access in nine state parishes that opposed legal online sports betting.
  • Sept. 16, 2021: The Louisiana Gaming Control Board establishes permanent sports betting rules, superseding the previous emergency rules. Retail sportsbooks are anticipated to launch a few months before online betting sites.
  • Oct. 31, 2021: Bobby Hebert, a former New Orleans Saints quarterback, places the first legal sports bet in a commercial Louisiana casino, wagering $1,100 on the Saints to cover a 4.5-point spread against the Tampa Bay Buccaneers.
  • Jan. 12, 2022: EGR Global reports potential delays in the online sports betting launch until Feb. 13, coinciding with the Super Bowl, due to concerns about geolocation tracking of bets.
  • Jan. 28, 2022: Online sports betting officially goes live in Louisiana.

Louisiana Sports Betting Future

Louisiana legislators have been cautious in estimating the potential revenue from online sports betting in the state. While concrete projections are scarce, one can draw comparisons with Mississippi, where the first year of legalized sports betting yielded $5.3 million in tax revenue, albeit under more restrictive market conditions pre-pandemic.

In Louisiana’s initial month with legal retail sportsbooks, the state collected approximately $570,000 in tax revenue. Extrapolating this over a full year suggests a potential $6.8 million in tax revenue, but this doesn’t include the revenue from Louisiana’s mobile betting segment, expected to significantly boost overall earnings due to its convenience and accessibility.

Regarding tax rates, Louisiana imposes a 15% tax on earnings from online sports betting, while the rate for retail sports betting stands at 10%. These rates align closely with the national median tax rate for sportsbooks, which sits at 11%, indicating that Louisiana’s tax structure for sports betting is largely in line with national norms.


About the Author
Nikhil Kalro

Nikhil Kalro

Nikhil Kalro covers the sports betting industry and revenue reporting at Gaming Today. Much of his work analyzes state revenue information, including betting activity and revenue for individual states and sportsbook operators. In addition, Nikhil provides news updates on the gambling industry itself, including product launches and legal issues. Nikhil’s previous experience includes five years with ESPN.

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