Louisiana to Legalize Sports Betting?

Louisiana is the latest state that appears to be on the brink of legalizing sports betting, providing a couple of significant issues can be resolved.

The next legislative session in Louisiana will not be held until April 2019, so there is time for representatives to consider sports betting legalization. They will be able to observe how other states have fared since sportsbooks were legalized and see what can be done better and what stakes should be avoided.

Senator Danny Martiny already outlined his plans for introducing a bill to legalize sports betting and others are expected to follow.

A bill had been in the works in spring 2018, but at the time legislators weren’t overly interested in being a frontrunner. The bill failed to pass the committee stage and make it to the Senate to be voted upon.

However, this time the bill will be entered into a very different climate. The entire industry has transformed since the spring, particularly as the federal ban on sports betting has been lifted following a Supreme Court decision in May.

Eight different states have now passed sports betting legislation since the federal ban was overturned, including neighboring Mississippi.

To date, 22 casinos in the state have opened up their own sportsbooks. With sports being such a popular attraction in Mississippi, there has been a strong response, particularly since the college football and NFL seasons have started. The state managed to bring in almost $32m in revenue during September.

A significant number of Louisiana residents cross the state border to bet at Mississippi casinos each year, and this will only increase now sports betting is legal there.

Key issues to overcome

Louisiana needs to overcome a few hurdles before a bill can gain enough traction to pass the Senate.

The first issue to be resolved is where sports betting could be offered.

The originally proposed bill only stated that sports betting could be offered at Harrah’s riverboat casinos in New Orleans. There are proposals for these riverboat casinos to be moved onto land in the near future. There could also be sportsbooks at race tracks, of which there are 20 currently in the state.

Video poker terminal owners who felt they were missing out have complained. They persuaded Martiny to alter his bill to allow these locations to also offer sports betting, which would be at more than 1,700 locations in Louisiana.

This clause in the bill is unlikely to be passed as it proposes far too many locations to be tenable. But the video poker lobbyists won’t give up the fight.

Another key question is whether to permit mobile and online betting. Mobile betting has never been stronger in the US. New Jersey’s latest sports betting figures show that more money went to mobile sportsbooks than those located at the land-based casinos in the state.

Louisiana has a significant black market for online sports betting and opening up sports betting at casinos would not stop this problem, according to state regulators. The bill would also need to include mobile gaming. To compare, Mississippi does not currently allow mobile sportsbooks.

Third is the matter of how much money the state could make from legalization. Tax rates have varied widely so far in the states that have opened up their sportsbooks. Louisiana would have to come up with an appropriate rate that would strike a balance between receiving enough tax revenue while not being so high that it acts as a disincentive for operators to advertise their offerings.

The American Gaming Association estimates that Louisiana could see additional revenues of between $52m and $62m with legalization, if the same gambling tax rate that it currently uses is also applied to sports betting.

It is important to note that sportsbooks have lower margins than other types of casino games. However, legalization would lead to more people visiting these casinos, and they could then be upsold on the facilities and other games on the site.

Louisiana must also consider the means by which sports betting legalization would be approved. There might not be any need to hold a referendum on the issue. However, this is probably the likely course of action if the legislature passes the bill.

Approval will be dependent on what areas of the state sports betting will be permitted. It could come into effect on a parish to parish basis. There is a proposal on November’s midterm elections in Louisiana for the allowance of daily fantasy sports betting via mobile devices. The outcome of this vote could be very revealing as to how a bill to legalize sports betting might fare if put to a public vote.

There is clearly a strong argument for legalization in the state, and it seems that there are many who would support such a motion when it goes forward for consideration.

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