Louisiana’s Sports Betting Tax Hike Spurs Backlash

Louisiana is the latest state to propose a substantial tax increase on sports betting, sparking significant debate in the industry. Republican Representative Roger Wilder filed House Bill 22 (HB22) in a special legislative session, proposing to more than triple the current gross gaming revenue (GGR) tax for online sports betting from 15% to 51%. This move, if successful, would align Louisiana's rate with New York’s—the highest in the United States. Additionally, the bill seeks to eliminate promotional credits, a measure widely used by sports betting operators to attract customers.

Filed on November 10, HB22 has been referred to the Ways and Means Committee, where it will need a two-thirds majority vote in both the House and Senate to pass. This proposal has faced strong resistance from the betting industry, which argues that such a tax increase could undermine the legal betting market in Louisiana and potentially push bettors toward illegal operators.

 

Current Tax Landscape and Proposed Changes

Louisiana presently imposes a 15% GGR tax on online sports betting, which generated $52.2 million in tax revenue from $358.2 million in net proceeds for the 2023-24 fiscal year. Operators also offered $44.4 million in promotional credits, which they were allowed to deduct from taxable revenue. Wilder's HB22 would prohibit these deductions, thus increasing the taxable revenue base and pushing up the overall tax burden.

If enacted, the proposed 51% tax rate, combined with the removal of promotional credit deductions, would have resulted in an estimated $182.7 million in tax payments last fiscal year—a staggering 671.6% increase over the current tax haul. Wilder's bill is part of a broader tax reform agenda spearheaded by Governor Jeff Landry, who has argued for an overhaul of Louisiana’s tax code, calling it “bloated” and “broken.”

The sports betting industry has responded sharply to Wilder’s proposal. Brendan Bussmann, a consultant with B Global Advisors, expressed concerns that the proposed tax hike could drive legal operators out of Louisiana’s market, opening the door to unregulated competitors. “There’s only so many times you can go to the golden goose before you kill the goose,” Bussmann remarked, highlighting what he views as a detrimental trend in state-level sports betting tax policies.

Brandt Iden, Fanatics’ vice president of government affairs, questioned why Republicans, who have championed low tax rates, would pursue such a drastic increase. “It seems strange to me that Republicans in Louisiana are looking to increase taxes over 300% on the industry,” Iden noted, adding that the proposed tax hike contradicts recent Republican promises to boost the economy by keeping tax rates low.

Louisiana is not the first state to contemplate increased sports betting taxes. In recent years, other states have explored higher GGR tax rates as a means of boosting public revenues. Illinois raised its tax rate to 20-40%, depending on the operator’s earnings, while Ohio doubled its rate to 20% earlier this year. New Jersey has also floated similar ideas, though efforts to raise the state’s tax to 30% have stalled.

Industry critics argue that escalating tax rates weaken the legal sports betting market, creating incentives for bettors to turn to illegal platforms that don’t face similar financial obligations. This, they argue, undercuts the benefits of regulation, such as consumer protections and problem gambling programs, which are central to the industry’s legalization in many states.

 

There’s only so many times you can go to the golden goose before you kill the goose.

 

Financial Impact on Louisiana’s Revenue Goals

For Louisiana lawmakers, a 51% tax rate represents a potential windfall. With $3.04 billion in bets placed in the state’s last fiscal year, the tax hike could yield a significant increase in state revenue, helping to address a projected $700 million budget shortfall. Under the new rate, Louisiana’s tax revenue from sports betting could have soared from $52.2 million to over $182 million last year—a crucial boost for state coffers.

However, opponents warn that this short-term gain may come at a cost to the industry’s long-term viability in the state. They argue that operators could scale back on local investments or even exit the market entirely, which would ultimately reduce state revenues rather than enhance them.

 

Conclusion

Louisiana’s HB22 proposal presents a critical juncture for sports betting legislation in the United States. As lawmakers weigh the benefits of additional revenue against potential industry pushback, the state’s experience could serve as a model—or a cautionary tale—for other states contemplating similar measures. If passed, the bill could signal a shift in how states balance tax revenue needs with the sustainability of regulated sports betting markets.