Louisiana could be the next market to take a look at its sports betting tax rate.
Last week, Rep. Roger Wilder filed a Louisiana sports betting bill, HB 22, aimed at increasing the state’s tax haul from the industry. His bill would raise the rate to 51%, an increase from 15% in the Bayou State’s original legislation.
The Louisiana Legislature is in a special session that started Nov. 6 and will run until Nov. 25. The bill will be heard 9 am Wednesday in the House Ways and Means Committee, which Wilder is on. To pass, it will require a two-thirds majority in both chambers.
Louisiana sports betting tax bill
Online Louisiana sports betting launched in January 2022.
Wilder’s bill would raise the tax rate and eliminate promotional deductions. In Louisiana, sportsbooks can deduct up to $5 million in promo spending in a fiscal year.
In the most recent fiscal year, sportsbooks handed out $44.4 million in promos. Operators paid $52.2 million in taxes.
Louisiana special session
The special session was called as Gov. Jeff Landry aims to help cover a $700 million budget shortfall. The shortage comes largely because of the expiration of a .45% sales tax, according to the Associated Press.
Landry proposed flattening the income and corporate tax rates, making the sales tax permanent, and extending it to services and online goods, like streaming services.
“This tax code is bloated, this tax code is broken, this tax code is incredibly outdated and this tax code is holding our state back,” Landry said at the opening of the session.
With Wilder’s tax rate, sportsbook operators would have paid $205.3 million in taxes during the previous fiscal year.
Taxes go up
Since New York implemented its 51% tax rate on sports betting revenue in 2022, states have started to look at their existing rates.
In Ohio, less than a year after launching, Gov. Mike DeWine doubled the tax rate to 20%. In July, Illinois Gov. JB Pritzker signed the state’s budget into law, which included a tiered tax system for sports betting operators ranging from 20% to 40%. The initial Illinois tax rate was 15%.
New Jersey and Massachusetts are among the other jurisdictions where lawmakers have discussed tax hikes.
