The coronavirus pandemic has caused a lot of delays. For Louisiana daily fantasy sports, the virus actually moved up the time frame.
Louisiana Gov. John Bel Edwards signed a bill establishing the tax rate for DFS on Tuesday. His signature finally answers the call of voters who, in most parishes across the state, chose to legalize the activity in 2018.
The Louisiana legislature can only deal with tax bills in odd years unless it holds an “extraordinary session.” The special session became necessary to deal with issues caused by the pandemic, which opened the door for Rep. John Stefanski to introduce H 64.
As a result of the Louisiana legislature finding a sudden urgency, Louisianians likely will be able to participate in daily fantasy sports contests on DraftKings and FanDuel by the NFL season.
“We’re still looking at this upcoming football season not knowing what will happen with the pandemic,” Stefanski said. “But we expect daily fantasy sports to be up and running in Louisiana for this football season.”
Path to Louisiana daily fantasy sports
Louisianans had a long wait for the legislature to move on authorizing daily fantasy sports.
Voters in 47 of 64 Louisiana parishes voted to legalize DFS in 2018. Those parishes represented 92% of the state’s population.
Constituents gave their lawmakers direction to pass DFS implementation and tax bills. But they ignored the message in 2019.
A bill introduced as DFS ended up getting loaded with other gambling issues, including sports betting. It failed on the last day of the session.
“I think there was urgency last year but it got caught up in some inner fights, particularly with sports betting,” Stefanski said. “They tried to package them together and it didn’t work.”
Louisiana lawmakers finally move on DFS
Perhaps because the tax bill was expected to have to wait until next year anyway, there seemed to be little urgency to pass an implementation bill for DFS this session. Sen. Barrow Peacock’s bill didn’t even make it out of committee.
Once legislators realized they were going to do a special session, they pulled the DFS bill out of a scrap pile.
They stripped an unneeded duplicate sports betting bill and plugged in the DFS language. H 357 passed 76-20 by the Senate on the final day of the session and got the governor’s signature on June 9.
The bill made the Louisiana Gaming Control Board the regulatory authority for DFS and instructed the board to institute rulemaking procedures no later than Aug. 1. Licenses are good for three years and cost between $5,000 and $40,000, with industry leaders DraftKings and FanDuel paying the highest figure.
Stefanski said legislative leadership asked for the tax bill now. The bill levies an 8% tax on net revenues of fantasy sports contests, with the proceeds going to the Louisiana Early Childhood Education Fund.
DFS passage creates optimism for LA sports betting
In moving the sports betting referendum bill through committee, Peacock and Henry expressed concern that sports betting would face the same legislative delays as DFS after the election.
Henry told Legal Sports Report that the two-thirds threshold needed for tax bills was difficult to reach. However, it wasn’t an issue for H 64. It passed 82-11 in the Senate and 36-0 in the House.
That bodes well for the prospects of sports betting implementation and taxation bills next year following November’s election.
“I’m much more optimistic because of the strong support of fantasy sports and the taxation of it,” Henry said. “But that doesn’t mean we can assume it will pass without an issue. Once the referendum passes, we need to get the interested parties together and start work early in December on how we’re going to implement and tax it.”
Stefanski added that he expects sports betting to receive voter approval in more than 47 parishes.
“I think more parishes will be interested in sports betting because people understand it more,” Stefanski said. “We had to explain to some older generations what fantasy sports were, but I think everyone understands sports betting.”
