Louisiana bill seeking to raise betting tax to 51% peters out

A bill by Rep. Roger Wilder will not go ahead in Louisiana after the legislator said he was not sure on how to proceed just yet. The bill would seek to increase the state's sports betting tax to 51%, which is a dramatic double-digit hike from the current 15%.

Louisiana bill that would seek 51% betting tax put on hold

The bill was going through the House of Representatives Ways and Means Committee earlier this week, but Rep. Wilder decided to withdraw HB 22 for the time being, as he feared that it would fail to garner enough support and move forward, but also expressed doubt about some of its language.

The bill, though, is a clear sign that lawmakers not just in Louisiana, but elsewhere, are looking to get a better bang for their buck when it comes to the legalization of sports gambling. In Rhode Island, New Hampshire, and New York, the state’s coffers already levy sports betting with a 51% tax.

Commenting on his decision to withdraw the bill, Rep. Wilder was loquacious about his motivation. He said that the "math doesn’t math" and that he needed to offer further changes to the core text to make it a more likely candidate to pass muster through the House and Senate, and then receive a signature at the government’s desk.

The bill seeks to also restrict operators who have been deducting promotions from their taxable sports betting revenue, which is more or less a double whammy for the industry, as they would have to trim their sales when it comes to promotions, and some may even choose to exit the market.

If the sports betting tax is 51%, it could triple the windfall the state gets from charging betting operators, a significant amount that could run around $200m a year.

Rep. Wilder has not given an exact timeline as to when he may seek to reintroduce an amended and updated version of the bill. One of the things that he may seek to change is the rate of taxation – although a 51% betting tax may sound like a good idea at face value, there are extenuating circumstances to charging so much out of sports operators.

The math doesn’t math

For one, sportsbooks may struggle to remain competitive, further forcing some to exit the market, and granting a free hand to others. The tax incentive behind the move is strong. Some have criticized the bill based on a comparison with New York, which is more populous and is not really a good example, the detractors argued.

However, they missed out on mentioning that New Hampshire and Rhode Island are much smaller states than Louisiana. HB 22 remains in the works, but when and if it will be reintroduced is still under question.

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