The Louisiana House of Representatives agrees with the idea of charging sportsbooks more tax, but thinks the initial suggestion was overzealous.
The House approved a bill this week that would raise the state’s sports betting tax rate from its current 15%.
Rep. Neil Riser’s HB 639 originally suggested hiking the rate all the way up to 32%, more than doubling it in the process. During its process in the chamber, that dramatic increase was tempered down to 21.5%. The 10% tax on in-person retail betting would not change.
The House Appropriations Committee overwhelmingly approved the increase in late April but the tax rate was altered at third reading before being passed by a 73-15 vote in the full chamber, surpassing the 70-vote threshold needed for the change.
It has been sent across to the Senate, where it awaits committee discussion. The bill is tied to another piece of legislation, HB 594, that would create a flat tax on insurance premiums. Riser’s bill can only be made law if that one is also passed; both received full House approval this week and now lie with the Senate.
Bill focuses on supporting college athletics
A core component of the bill is its focus on supporting college athletics programs with sports betting tax revenue.
Riser’s bill would change the way sports wagering tax revenue is apportioned and newly dedicate 25% of it to a Supporting Programs, Opportunities, Resources and Teams (SPORT) fund that would benefit student-athletes at Louisiana’s public universities that compete at NCAA Division I level.
Other revenue would go towards measures such as early education, local governments in the state and problem gambling supports, as it already does.
Numerous lawmakers spoke during the House process in support of the bill, pointing to higher revenue potential and its usefulness for the state. So, too, did representatives from state schools, who particularly noted that the extra revenue would go a long way for smaller qualifying colleges.
As would be expected, sportsbooks opposed the hike, particularly in its drastic original form.
When the initial proposed new rate of 32.5% was still in place, state fiscal analysts estimated that the bill could nearly triple sports wagering tax collections by 2023, from about $59 million to $190 million annually. Updated projections for the revised increase rate have not been provided.
Other states pushing for increases
Louisiana is one of several states in which lawmakers have pushed for increases to sports betting taxes this year.
For example, in both Ohio and Maryland, the respective governors pushed for significant tax hikes in their fiscal budgets. While Ohio Gov. Mike DeWine‘s attempt to double the rate from 20% to 40% was voted down, a bill filed in that state last week would make the state the first in the U.S. to tax online sportsbooks on both handle and revenue.
In Maryland, meanwhile, a scaled-back tax increase was signed into law in recent days. Gov. Wes Moore initially pushed for the rate to be doubled from 15% to 30%, but lawmakers pushed back and ultimately settled on a compromise of 20%.
