Louisiana Lawmaker Wants To More Than Triple Sports Betting Tax Rate

A Louisiana lawmaker is seeking to drastically increase the state’s rake on online sportsbooks, as Rep. Roger Wilder III (R-Denham Springs) on Monday filed a bill (HB 22) that would send the tax rate on online sports betting to 51% from the current 15%.

The 51% number did not come out of thin air, of course. That’s where New York set the bar for online sportsbooks, highest in the nation (tied with New Hampshire and Rhode Island). The proposed tax hike would not apply to wagering revenues derived from brick-and-mortar sportsbooks.

Additionally, the bill would prevent licensed sportsbooks from offering promotional play in Pelican State, and therefore would also bar them from deducting those sums from taxable revenues. According to the Louisiana Gaming Control Board, those deductions amounted to $44.4 million last year.

According to an analysis by iGamingBusiness, last year’s tax collection of $52.2 million from sportsbooks would have ballooned to over $205 million if the tax hike and lack of promotional credits in Wilder’s new bill were applied. Louisiana’s “third extraordinary session” is currently underway until Nov. 25, while the next regular legislative session will convene on Monday, April 14, 2025.

Not the first rodeo

If passed, Louisiana would join Ohio and Illinois as states that jacked up the tax rate on online sportsbooks after operators had been plying their wares in the state.

In Ohio’s case, Gov. Mike DeWine introduced a doubling of the tax rate, from 10% to 20%, in his 2023 state budget bill, which was passed by the legislature.

In Illinois, Gov. J.B. Pritzker signed a bill this past June that created the nation’s first progressive tax rate for sportsbook operators.

Instead of the flat 15% as originally passed, the tax rate can go as high as 40% for sportsbooks that have annual adjusted gross sports wagering receipts north of $200 million. The lowest tax rate would be 20%, reserved for those sportsbooks with annual adjusted gross sports wagering receipts of under $30 million. Based on last year’s numbers, only DraftKings and FanDuel would pay the 40% rate.

Other states have toyed with the idea, including New Jersey, where state Sen. John McKeon introduced a bill earlier this year that would have raised the tax rate on online sportsbooks as well as on iGaming proceeds, to 30% from 13%, though the bill did not gain traction in this year’s session or even a single co-sponsor.

Of course, New York state set the much-maligned (by the sportsbook industry) 51% rate when the state legalized sports betting in January of 2022. At the time of the legislative discussions, then-Gov. Andrew Cuomo was against legalizing sports betting, and insisted on the 51% number in order to get his blessing. Lawmakers eventually gave in, nine sportsbooks have played ball, and there is nothing on the horizon to indicate New York will be lowering the tax rate at any time in the near – or distant – future.