Legislation to legalize betting on college and professional sports hasn’t been heard yet, but a Louisiana House committee Tuesday agreed on how to collect the taxes and to send the money primarily to benefit early childhood education.
In addition, though fantasy sports is still in its infancy, the House Ways & Means Committee approved legislation to also send any proceeds to help fund education and care for children from birth to three years old.
Abramson said he had a change of thinking about dedicating certain revenues to specific programs. Where once he disapproved of statutory dedications, he now sees a way to get new money for a previously lowly funded program. “We have not been able to get the finances to that critical service, early childhood,” he said.
Fantasy sports contests were approved by 47 parishes in November.
House Bill 495 would impose an 8 percent state tax on the monthly net proceeds of fantasy sports operations that also would have to pay $5,000 annually for a license. The money, after regulatory fees are spent, would go to the Early Childhood Education Fund with a small portion going to programs that address programs for compulsive gamblers.
In November, voters in nearly three out of four parishes in Louisiana voted to legalize online sports fantasy games for cash prizes.
Fantasy sports is an online game where players pay for specific athletes to be part of a team and compete based on how well the athletes perform in real world contests. People spend about $500 a year and can play the game using apps on their phones.
The Legislative Fiscal Office calculated, using New York’s experience, that Louisiana could receive about $375,000 in tax receipts.
State Rep. Stephen Dwight, R-Lake Charles, pointed out that 47 of the state’s 64 parishes approved but the children’s fund would help pay for programs in all 64 parishes.
“So, some parishes that voted against fantasy sports will reap the benefits,” Dwight asked.
Alton Ashy, a lobbyist for videopoker and gambling interests, said as voters approved fantasy sports, existing casinos don’t oppose and they’re fine with the money going to early childhood education. Their opposition is to the low tax rates being charged. Casinos pay about 22 percent tax.
Sports fantasy operations use the internet and don’t need to be located in Louisiana. They also hire Louisiana residents and have buildings that gives the state leverage that taxes will be paid, he added.
Abramson said he was open to changing the tax rates and licensing fees. His focus is on setting up a collection system for any revenues generated by sports betting and fantasy sports.
House Bill 498 would impose a state tax of 8 percent on monthly net proceeds from wagering on college and professional sporting events. The betting, if approved, would take place at licensed riverboat and land based casinos as well as at racetrack casinos.
An annual gaming license costing $5,000 would also be required for a sports betting operation.
Abramson said he picked the figures from what other states, particularly Mississippi, charged. But whatever the tax eventually would be levied is really up to the legislators, Abramson said. His main goal is to ensure that the money goes into the Early Childhood Fund.
But the legislation that would establish sports betting, Senate Bill 153, hasn’t taken its first step yet and been heard by the Senate Judiciary B committee.
If approved by both chambers of the Legislature, the issue then would go on a statewide ballot to be decided by a vote on a parish-by-parish basis.
The earliest date an election could be held is Oct. 12. If approved, the Gaming Control Board would need about five months to come up with rules. And then licensing procedure would begin. The state probably would see receipts until July 2020 and beyond.
Mississippi reported generating $2.5 million of tax revenue from a 12 percent tax rate for seven months, according to the Louisiana Fiscal Office. This might annualize to about $5 million of tax revenue for Mississippi.