Sports Betting

A gambler places a bet at the sportsbook at a  casino in Atlantic City, N.J. Now that sports betting bills passed by the Louisiana Legislature have been signed into law, the first legal bets in the state could be placed at the end of football season.

Lawmakers aren’t sure what “sports betting” will look like in Louisiana, who gets to participate and how, when the Legislature convenes on April 12.

But a sure bet is that legislation allowing Louisiana residents to make wagers on football, basketball and other sports, in some form, will be introduced and passed by June 10 when legislators leave Baton Rouge.

“It has to be,” said state Sen. Ronnie Johns, a Lake Charles Republican who is considered the go-to legislator on gambling issues. If not, it’ll be two more years before sports betting will happen because tax measures can only be considered in odd-numbered years. That means at least three more years before tax revenues can be collected for the state treasury.

“We have to take our shot right now,” Johns said.

The state already is a few years behind competitors, like Mississippi, when it comes to “sports betting.” Meanwhile, legislatures in Alabama, Georgia, Maryland, and several other states already have convened and are passing bills to get sports betting up and going in their jurisdictions. Half the nation’s 50 states, and the District of Columbia, have legalized sports betting since 2018, according to ESPN, after the U.S. Supreme Court allowed the states to engage.

Johns’ biggest nightmare is if Texas allows gambling, including sports betting, as his district has three Las Vegas-style casinos that are a two-hour drive for the 7 million people in the Houston metro area. That anxiety was relieved somewhat last week when the Texas lieutenant governor, who holds much more power than the post is allowed in most states, noted that gambling bills were bogged down by infighting between the special interests. “And so, it’s not even going to see the light of day this session,” Texas Lt. Gov. Dan Patrick said in a radio interview on Tuesday.

In 2020, Pennsylvania residents wagered $3.5 billion on sporting events. For New Jersey, the handle – how much money people betted – was more than $5 billion, according to The Sports Betting Network.

In Louisiana, a lot of special interests, as well as state government, want in.

Louisiana has 13 riverboat casinos, which now are allowed to come ashore, a land-based casino in New Orleans, and four racinos, which are slot machines and table games found at commercial casinos but are located at horse tracks.

Operators of video poker devices found trucks stops, bars, restaurants and elsewhere, also want part of the action. As do the traditional sports bars with lots of television screens, fried food and beer for customers who may want to use a properly affiliated kiosk to bet on the games they’re watching.

Johns is drafting a bill, as other lawmakers are, but doesn’t quite know yet what the measure will say as all the interested parties are still negotiating. “There’s all kinds of moving parts right now from the industry and those that want to participate,” he added.

“We’re working on draft,” said Wade Duty, executive director of the Baton Rouge-based Louisiana Casino Association. But the final version will have to be accepted by casinos that are members of the association. The bill will outline how sports betting will work.

“The good news is, well, the silver lining is the fact that Louisiana will be four years after some states already have operational sports wagering that we are able to look at and see what has worked well in other states,” Duty said.

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Louisiana legislators will have to decide whether to allow mobile sports betting or to restrict sports wagering to in-person bets inside a casino. A second bill, which can only begin in the House, will set the tax rates for the game.

The first step is to determine whether to allow online betting, which opens the door to allowing customers to place mobile wagers over their cell phones.

The technology is such that a bettor can be driving on Interstate 10 or waiting in line for donuts and make a bet on the LSU Tigers. The “geo-fencing” technology is such that the wager can be taken in one of the 55 parishes that voted to allow sports betting, but not in one of the nine mostly rural north Louisiana parishes whose voters refused. That is essentially what New Jersey does.

New Jersey used relationships with existing casinos within the state. The operators were allowed to contract apps that could take bets from anywhere in the Garden State. New Jersey regulators already had investigated the players and knew casinos were familiar with the rules and protocols.

But New Jersey has about 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. Part of the state is among the 20.3 million people in the New York metro area and the other part is in the Philadelphia metro area with 6.1 million people.

The alternative would be to require the bettor to show up in person to make the wager, which is being called the Mississippi Model. Sports wagering is permitted inside casinos – Mississippi has 26 of them. 

December wagers of $55.3 million netted Mississippi gaming operators $7.8 million of revenue, of which the state of Mississippi took 12%, or $932,000, said Greg Albrecht, the Louisiana Legislature’s economist.

Mississippi legislators, who convened on Jan. 5, flirted with legislation allowing people within the Magnolia State to use mobile devices to bet on sporting events. Republican state Sen. Philip Moran, from the Kiln and sponsor of Senate Bill 2732, noted that Mississippi’s neighbor to the north, Tennessee, legalized mobile sports betting in November. Tennessee collected $5.4 million in privilege taxes in the first two months of its online-only sports betting program, the Associated Press reported. In November and December, online bettors placed $312.3 million in sports wagers in the Volunteer State.

But Mississippi wasn’t quite ready for mobile betting and legislative committees on Feb. 2 rejected both senate bills.

What Louisiana tax rates will look like will depend largely on whether legislators allow mobile wagering or require bettors to physically go to the casinos.

Tax rates could be as high as 20%, which is what lawmakers sought in 2019, when the effort failed. Most revenues from casino-based games are taxed at 21.5% in Louisiana.

“We’ll have to walk away from it,” if the number gets that high, Duty said of sports betting. “There’s something that legislators don’t understand and that is this is not cash windfall for casinos, it’s an amenity.”

The idea is to draw customers to the property and while there, they will play other games, eat in the restaurants, perhaps spend the night, and catch a show.

Anything over a 10% tax rate makes sports betting financially unfeasible for the casinos, Johns said.

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