Scott Ward from the Sports Betting Alliance s the show to discuss the implications of House Bill 639, which proposes to increase the tax rate on sports betting in Louisiana from 15% to 32.5%. This bill, introduced by Neil Riser, has moved to the House floor but is not yet scheduled for debate. Ward expressed concerns about the potential negative impact on the sports betting industry and the broader economy.
Ward explained that the current 15% tax rate was established when sports betting was legalized in Louisiana in 2022. The proposed increase would align the tax rate for sports betting with that of truck stop video poker. This significant hike could lead to worse odds and fewer promotions for consumers, as operators would struggle to offer competitive products. Additionally, the state might see reduced investment in sponsorships and advertising, affecting local media outlets.
For those unfamiliar with online sports betting, Ward provided an example using the DraftKings app, where promotions like “no sweat bets” might no longer be available in Louisiana. These promotions are crucial for attracting new s and keeping existing ones engaged. Without them, consumers might turn to offshore or unregulated betting sites, which do not contribute tax revenue to the state.
Ward highlighted that before sports betting was legalized, Louisiana did not benefit from any tax revenue from bets placed offshore. Doubling the tax rate would force operators to the increased costs onto consumers, either through reduced promotions or less favorable odds. This could make legal sports betting less attractive compared to unregulated options.
Comparing Louisiana’s current 15% tax rate to other states, Ward noted that it is in line with the national average of 14% for states with competitive markets. Raising the rate to 32.5% would place Louisiana among the highest in the nation, alongside states like Illinois, New York, and Pennsylvania.
Ward also mentioned that other states have attempted similar tax increases, with mixed results. For example, Ohio raised its tax rate from 10% to 20%, leading to a reduction in promotions and the exit of several operators from the market. He warned that a similar outcome could occur in Louisiana if House Bill 639 es.
In conclusion, Ward emphasized that the proposed tax increase would not only affect out-of-state companies but also have a significant impact on local casinos and jobs. He urged lawmakers to consider the broader implications of the bill on the state’s economy and the sports betting industry.