Louisiana lawmakers on Wednesday morning took the first step toward building a framework for legal sports betting when the House Ways and Means Committee moved a substitute bill that sets the tax rate for retail wagering at 10% and the rate for digital wagering at 18%. HB 628 is one of two bills that will be needed in the House to develop a framework after voters in 55 of 64 parishes legalized sports betting on the November 2020 ballot. A similar package of bills will move through the state Senate.
Bill sponsor Rep. Todd Stefanski presented the bill before a willing Ways and Means Committee, where he heard from multiple lawmakers who said they would support his proposal. After about 40 minutes of discussion, the substitute bill was reported out of committee. Stefanski said the substitute deals with taxes, fees, and lottery issues, though it was not available to review. With regard to sports betting, the bill would set the application fee at $250,000 with a $500,000 “franchise fee,” which is good for five years.
According to Stefanski, 20 land-based licenses, each with two skins, will be available should the package of bills be approved, and the Louisiana Lottery will also be entitled to have an online skin and retail locations. Lottery locations would offer wagering via kiosk, and any lottery partner or Class A alcoholic beverage licensee could participate in sports betting.
“We wanted to find a way for your local bar, local restaurants to take part in this, and we think this is the way, and also would allow for kiosks in each place,” Stefanski said in introducing the bill.
Lawmakers eager to create framework
Details of what non-lottery sports betting would look like are part of Senate President Patrick Page Cortes’ SB 202, which caps the number of licenses at 20 for the state’s 15 riverboat casinos, the Harrah’s land-based casino in New Orleans, and four horse racetracks. The Louisiana Gaming Control Board would be the regulator. The bill is in Judiciary B Committee with no hearing date.
Sports betting winning lopsided approval across south Louisiana: EBR, 72 percent; Jefferson, 74 percent; Lafayette, 62 percent; Plaquemines, 69 percent and St. Tammany, 65 percent.#lapols
— Will Sentell (@WillSentell) November 4, 2020
Stefanski said he and Cortes — who as Senate president should have the weight to get his bill passed — are working together on the framework and details. The decision by voters to legalize last November was a long time coming, as lawmakers in Louisiana have been debating legal sports wagering nearly since the Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018 and made it a states’ rights issue. Voters approved daily fantasy sports in 2018, but that is still not available to residents, in part because any legislative decision involving taxes requires a two-thirds majority.
“Last time we did this, we had egg on our faces because this is what the voters wanted but we couldn’t give it to them,” Rep. Jeremy LaCombe said, likely in reference to DFS.
When lawmakers opted to put sports betting on the ballot last year, they did so with the promise that they would figure out the tax rate for both sports betting and DFS this session.
Still playing catch up with Mississippi
The state has traditionally lagged behind its gaming neighbor Mississippi, but should Louisiana lawmakers approve statewide mobile, it will be the first in the region to allow bettors to wager from their mobile devices. Mississippi regulators launched retail sports betting with an on-site-only mobile option on Aug. 1, 2018.
“The kicker here is full mobile,” Stefanski told the Ways and Means Committee. “If you look at Mississippi, they have mobile, but you have to be on the gaming floor. But if we pass full mobile, I think we’ll be on the higher end of the spectrum.”
Neither of Louisiana’s other two border states, Arkansas or Texas, offers mobile sports betting. Arkansas has legal wagering at a handful of racetracks around the state, and while there are several legal sports betting bills floating around Austin, Texas has traditionally been an anti-gaming state.
*Texas House Holds Hearing On Sports Betting Legalization Bill
• Penn National Gaming VP, Texas Rangers President, and the CEO of the Houston Rockets spoke in favor of the bill.
• Texas legislators believe legal sports betting could generate ~$48 million annually in taxes.
— Roundhill Investments (@roundhill) April 15, 2021
Of major concern to Louisiana lawmakers Wednesday morning was how tax money from wagering would be spent. In the past proposals, sports betting revenue has been tied to early childhood education, and one representative suggested that her constituents voted for the referendum with that in mind. HB 628 deals only with revenue from lottery-based sports betting, and Stefanski, who said his brother is autistic, said that would be earmarked for a “developmental disability sub-fund” and for K-12 education. Cortes’ bill deals with sports betting proceeds from commercial entities.
The substitute to Stefanski’s bill wasn’t readily available, but he promised to keep his peers up to speed on what is happening with sports betting in the hopes of moving both his and Cortes’ bills quickly and cleanly through the legislature.
“I just want sports betting to become a reality,” he said. “I don’t want us to fumble the ball again, and I don’t want everyone in the state to be looking at us and saying ‘Why didn’t you do this?'”
The session is set to adjourn June 10.