Louisiana Sports Betting Update: Restrictions On Free Play Could Boost Tax Revenue

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Louisiana is nearing passage of a bill that could bring more sports betting tax dollars to the state. 

Senate Bill 290 would prohibit sports betting operators like FanDuel and DraftKings from claiming more than $5 million in promotional play from sports betting in Louisiana per year. Under the current structure, operators are able to exceed $5 million in untaxable promotional play per “skin,” or mobile app they run throughout market access deals with licensed casinos and racinos.

Limiting free bets to no more than $5 million in untaxable revenue per operator per year appears to be the state’s original intent. The limit would match the current limit on  eligible promotional play per calendar year per licensee.

The change would likely mean more state revenue as tax-free options tighten. 

The bill passed the Louisiana Senate by a vote of 27-3 on April 28. It was referred for House passage on May 12 is expected to pass both chambers before the current legislative session ends on June 6. 

Promotional Play Limits Apply To Licensees – Not Apps

Senate President Page Cortez, R-Lafayette, was the lead sponsor of the 2021 state law that created the regulatory framework for sports betting in the 55 parishes that legalized it in 2020. He is also the lead sponsor of SB 290, which he says will clean up unintended consequences of the 2021 legislation. 

Cortez said during a May 10 committee hearing on SB 290 that state regulators at the Louisiana Gaming Control Board want to ensure that promotional play is tied to the licensee, not each app. 

Cortez said the bill would help keep taxable revenue in line with what he says was intended in 2021.

“We didn’t (plan on) $5 million of promotional play per app. It was just for the licensee,” Cortez to the House Committee on Administration of Criminal Justice, which approved the bill 8-0. “We don’t get tax money on promotional play. “We wanted to allow them to do the marketing and promotions but, at some point, we didn’t want it to be so much … that we wouldn’t end up getting any revenue.”  

Rural Parishes Could Benefit As Well

Changes under SB 290 also improve local government revenue in parishes that don’t have casinos or racinos but do have plenty of sports bettors who wager by mobile app. 

Cortez said SB 290 clarifies sports betting tax revenue is to be proportionately distributed to all 55 parishes based on the percentage of parish voters who supported legalization. The change, he told the committee on May 10, will benefit mostly-rural parishes that voted for sportsbooks in 2020. 

“You could have a person wagering a large (amount of money) from a rural parish and then you could also have, say, Orleans where you have a land-based casino, there could be a lot of people walking in and placing a $10 wager,” said Cortez.”

“What we do, we take the portion of the tax that’s dedicated to locals and split it up pro rate, based on population.”

Ten percent of Louisiana sports betting tax revenues are allocated to the 55 parishes under the state’s  2021 sports betting law. The state taxes sports betting at 10 percent retail and 15 percent mobile. 

As many as 41 sportsbooks are possible in Louisiana under the 2021 law. A sportsbook operated by the Louisiana Lottery Corporation may also open sometime this year. 

About the Author

Rebecca Hanchett

Writer and Contributor
Rebecca Hanchett is a political writer based in Kentucky's Bluegrass region who covers legislative developments at Gaming Today. She worked as a public affairs specialist for 23 years at the Kentucky State Capitol. A University of Kentucky grad, she has been known to watch UK basketball from time to time.

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