Louisiana lawmakers have been down this road before. In 2018, lawmakers sent the decision to legalize daily fantasy sports to the voters. Eighteen months later, Louisianans still can’t play. And legal sports wagering may be headed in the same direction.
A Senate committee approved three amended sports betting bills, at least two of which will now go to the Finance Committee. But legal sports betting could, well, run into the same issue as daily fantasy — the bills call for a referendum and do not include a tax rate.
A two-thirds majority of Louisiana lawmakers must approve any tax bill, and that’s been too high of a bar for lawmakers to clear so far on the daily fantasy front.
Text of sports betting proposition
“We are again going down the path to ask people if they want sports betting,” said Sen. Barrow Peacock, sponsor of bills on both daily fantasy sports and sports betting this session. “And if that’s the will of the people, and if we can’t pass the taxation, the people of Louisiana are going to be” upset.
Louisiana fantasy sports betting rules fail to win passage https://t.co/6XTiADHiFd
— wdsu (@wdsu) June 7, 2019
Forty-seven of Louisiana’s 64 parishes voted in favor of legalized DFS in in 2018. This time around, sports betting will be on the ballot if SB 130 gets through both chambers. The bill includes the wording for a proposed referendum:
“PROPOSITION TO AUTHORIZE SPORTS WAGERING ACTIVITIES.
Shall sports wagering activities andoperations be permitted in the parish
of _________________? YES ( ) NO ( )”
Should voters in any parish approve sports betting, lawmakers would then be tasked with developing infrastructure, including rules for licensing, regulating, and taxing sports betting.
Bill sponsor Sen. Cameron Henry offered one amendment, which clarifies that the Louisiana Gaming Control Board will be the regulator. The amendment and bill passed the Judiciary B committee with little discussion.
Henry’s bill is the most likely to move forward in this session. It strictly asks residents if they favor sports betting and has no regulatory application or tax framework.
“We’re just going to pass the referendum bill, see if folks like it and next year, start the process of putting regulations in a bill that we’ll have months to work on rather than days or weeks,” he said.
Taxes, taxes and more taxes
But senators did discuss the two other bills — SB 378 and SB 332, initially similar bills that call for sports betting on riverboat casinos as well as at the Harrah’s Casino in the city of New Orleans and statewide horse racetracks. The proposed legislation allows for on-site mobile sports betting and sets the sports betting minimum age at 21. The bills would also allow for betting on all professional, Olympic and collegiate sports, but betting on eSports would be prohibited.
SB 378 was amended to match the language in the referendum-only bill and passed easily, before discussion on SB 332. Besides the tax issue, which Peacock pointed out on a DFS bill that was deferred, he opened discussion about a Louisiana tax on casino promotional offerings. According to state law, promotions are taxed at 23%, meaning casinos are essentially taxed “on their own money” every time they send out a promotional voucher.
According to lawmakers, neither neighboring Mississippi nor Oklahoma has such a tax. SB 332 was ultimately stripped and replaced with language that would eliminate the 23% tax. The net result is that a package of three bills — none with a tax rate — will move forward.
A bill before the Louisiana House in 2019 sought to allow sports betting at video poker locations inside casino properties. An amendment to SB 153 called for an additional tax for horsemen’s groups that would have pushed the overall tax rate on sports betting proceeds to around 13%. The bill ultimately died last May when the House Appropriations Committee did not advance a heavily amended version of SB 153.
The legislature is set to adjourn on June 1, meaning lawmakers are on a tight schedule. But there could be a special session this summer during which tax issues would be discussed. Tax bills can only originate in the House in Louisiana.
“If there is any way to jumpstart this industry again, it will be to allow them to issue promotional play at a much greater threshold, said Sen. Ronnie Johns, who also pointed out that the state is down $100 million in revenue since shutdowns around coronavirus began in March.
No betting on those 21-and-under?
There is another potential issue going forward with SB 378, though lawmakers did not address this issue Tuesday.
In the bill, betting on individuals who play collegiate sports or participate in the Olympics is allowed. However, there is also this line: “A wager shall not be placed by a person who is under the age of twenty-one years.” The two sections would appear to be at odds as many Olympic athletes, especially those in marquee television sports like gymnastics, are under 21, and, of course, many college athletes are under the age of 21.
It’s DEFINITELY time Louisiana legalize marijuana & sports betting. What thee hell are we waiting for
— Public_B_Enemy (@BSPN_NewOrleans) March 13, 2020
If passed, the sports betting would become legal on June 10 of this year. Louisiana has a mature gaming infrastructure. Casinos have been part of the landscape for more than 20 years, and sports betting has been a key topic in the legislature for several years, though former Sen. Danny Martiny could not push it through last year, after several other gaming bills were added to sports betting.
Lawmakers are likely feeling increasing pressure to legalize. Mississippi was among the first five states to offer legal sports betting nearly two years ago, and the coastline from the Louisiana border to Biloxi — just an hour from New Orleans — is dotted with casinos and now sportsbooks. In the intervening years, neighboring Arkansas legalized in November 2018 via referendum.
