A lawmaker in Louisiana is aiming to raise the state’s tax rate on sports betting during a special session focused on growing the economy.
Rep. Roger Wilder has introduced a new measure, House Bill 22, which aims to amend and reenact Louisiana’s gaming law to raise the state’s tax rate to 51% on gross gaming revenue for sports betting operators. Active state law levies a 15% tax rate on revenue. The increase would place Louisiana next to New York as markets with the highest rates.
Wilder introduced HB22 during a special tax reform session called by Gov. Jeff Landry last month. The 20-day extraordinary session, which began on Nov. 6, was called in an effort to rebuild Louisiana’s archaic tax system and grow the state’s economy. The special session has also seen an effort by lawmakers to offer a flat 3% tax rate on personal income.
According to lawmakers, Louisiana’s budget could have a $700 million shortfall next year.
In addition to raising the state’s tax rate, HB 22 also proposes to ban operators from offering promotional credits to players, which are deducted from their taxable income. According to the Louisiana Gaming Control Board, operators across the state dished out $44.4 million in promotional credits to players during the fiscal year ending June 30.
HB 22, introduced earlier this week, has been referred to the House Ways and Means Committee. To pass, it needs a two-thirds majority vote in both the House and Senate.
Tax rate changes outside of Louisiana
Louisiana joins a group of U.S. markets dealing with tax reforms.
Earlier this year, Illinois Gov. J.B. Pritzker signed a new budget plan that sees operators taxed on a sliding scale based on their adjusted gross revenue. Licensed operators in the Land of Lincoln that report over $200 million in revenue are taxed at a 40% rate, nearly triple the previous rate of 15%. Operators that are under that threshold are taxed at 20%.
In August, the new tax rate in Illinois generated $13.6 million in revenue. That month, the state’s operators accepted $879 million in wagers with adjusted revenue at $59.2 million.
New Jersey lawmakers are also looking to raise the state’s tax rates for sports betting and iGaming to 20% by introducing Bill S3064. Active law sees sports betting operators taxed at a 14.25% rate with iGaming at 15%. iGaming operators are also required to pay an additional 2.5% to the Casino Reinvestment Development Authority.
Sen. John Keenan attempted to raise the tax rate on sports betting revenue in Massachusetts from 20% to 51% but the Senate rejected his proposal.
