While nearly two out of three Louisiana voters backed sports betting on Election Day, the money raised for state services will likely be well short of a jackpot.
The legislation that authorized the vote did not include an estimate on how much money it will generate. But a fiscal note — the portion of legislation that addresses the financial impact — that was added to a separate sports betting bill earlier this year said "total tax receipts the state might expect to eventually receive are relatively small."
That note also said the experience in Mississippi, which authorized sports betting in 2018, might be indicative of what it will mean in Louisiana.
In 2019 sports wagering raised about $3.5 million for that state, said Allen Godfrey, executive director of the Mississippi Gaming Commission.
"You are definitely looking at a relatively small source of revenue overall," said Alan Levin, principal associate for The Pew Charitable Trust, who has written about the subject.
Voters in 55 of the state's 64 parishes endorsed the games on Nov. 3, some by margins of 70% or more. The plan passed with 65% of the vote.
Lots of residents view sports betting as a great source of fun, especially in a football-mad state like Louisiana, and are not worried about what it will mean for education, health care and other state services.
Voters in 55 of 64 parishes Tuesday approved sports betting, setting up a major battle in the Louisiana Legislature on exactly what form the w…
Only nine parishes, mostly in rural north Louisiana, rejected the proposal.
A ballot measure that would allow betting on football games and other sports won lopsided approval Tuesday night across south Louisiana, inclu…
The group behind the push, Louisiana Wins, aired radio and other commercials ahead of the election that said sports betting would benefit education, highways and bridges.
No specific figures were mentioned.
One of the key stumbling blocks to estimating what the wagering will mean for state services is the question of how it is implemented.
Under one model, Mississippi and some other states limit the wagering to casinos only. The bets are pitched as a way to gather with friends and family, watch the games on big-screen TVs and have fun with the betting.
Other states, including New Jersey, allow bettors to make wagers on their smartphones and on the internet. New Jersey has generated $80 million for the state since June, 2018 and 80% of that stems from bets using apps and the internet, according to Legal Sports Report.
The practice is said to have so much appeal that bettors take the train from Manhattan to Hoboken, N.J., place their wagers and return to Manhattan, said Chris Altruda, a sports betting industry analyst with NJOnlineGambling.com.
"Everybody that knows the industry knows that if you don't do mobile, it is not going to be much money," said House Speaker Pro Tem Tanner Magee, R-Houma. "If you do mobile, it is."
Earlier this year Magee sponsored a sports betting proposal — House Bill 357 — that was later changed to one focused on fantasy sports.
The other issue for lawmakers is how much the industry will be taxed.
Both topics are expected to spark controversy in 2021 when the Legislature debates how sports betting will be implemented in Louisiana.
But whether the betting will be limited or wide open is expected to spark the most arguments.
"It is highly dependent on what model Louisiana would adopt," said Wade Duty, executive director of the Casino Association of Louisiana.
"If you adopted a Mississippi model it is not a massive revenue engine," Duty said. "If you adopt a New Jersey model it is a significant addition."
Duty said his group has not taken a stance on which way to go.
Altruda said states are well advised to allow mobile betting.
"If lawmakers have a proper sense of urgency and keep the timeline within 12 months to 15 months and you are ready to launch by 2022 you have done a good job," he said. "And if you get the mobile component you have done a better job."
Gene Mills, president of the Louisiana Family Forum, said Tuesday's vote raises the specter of gambling in Louisiana seven days per week, 24 hours per day.
Mills said his group wants to ensure that sports betting does not prey on minors or gambling addicts.
Even gambling-rich states like Nevada are not getting a windfall on sports betting alone.
In 2019 that state collected $22.2 million of tax revenue from $5.3 billion in sports betting, according to Louisiana legislative officials.
The tax rate there is 6.75%.
Mississippi charges 12% on gross gaming revenue, with 8% for the state and 4% for local governments.
The state's share is dedicated to roads and bridges.
Godfrey said that, while the amount of money generated by sports betting is limited, it offers a significant boost to foot traffic in the state's casinos.
"When they are there they evidently have a tendency to play the other games that are available," he said.
Godfrey and others also noted that Louisiana could benefit by drawing sports betting enthusiasts from Texas.
Legal Sports Report said 15 states have generated $258 million in tax revenue since June of 2018, shortly after the U.S. Supreme Court opened the doors for states to do so.
A total of 21 states, including the District of Columbia, allow sports betting today, and Virginia, South Dakota, Maryland and Louisiana are joining that group, Altruda said.
The amount raised by New Jersey is striking but there are huge differences between that state and Louisiana.
New Jersey has nearly twice the population of Louisiana — nearly 9 million residents — and a median household income that is nearly double that of Louisiana at about $110,000.
Louisiana's operating budget is about $35 billion.
The Pew Charitable Trust notes that gambling revenue can be erratic.
Levin said the addition of sports betting can spark an uptick in gambling money initially "but then it tends to taper off."
Regardless what sports betting generates for the state there will be maneuvering at the State Capitol to get some of the proceeds.
Early childhood education advocates, who have fought for years to land steady state aid for child care operations, already view the money as a potential source of funding.
Day care centers have faced closures, massive layoffs and drops in revenue during the coronavirus pandemic.
"It's imperative that we have a recurring revenue source to support the early care and education in our state," Libbie Sonnier, executive director of the Louisiana Policy Institute for Children, said in an email.
"Many legislators ran on ECE and now is the time for them to support the sector," Sonnier said.