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Louisiana Sports Betting, DFS Bills Set For Latest Go-Round

Louisiana lawmakers will once again consider bills to legalize sports betting and daily fantasy sports, but do so with unprecedented logistical challenges in addition to the long-standing political hurdles that tanked similar efforts in each of the past two years.

A Senate judiciary committee is scheduled Tuesday to discuss three sports betting legalization bills along with a separate DFS authorization measure. A positive vote from the committee would give any or all of these bills momentum, but would be just the first step in a long legislative process.

Sports betting seemed like a good bet for Louisiana in 2018, the first year states were allowed to legalize sports wagering, and again in 2019. Both times bills fell short due to questions over purveyor access as well as pockets of opposition from conservative anti-gambling advocates.

Though Democratic Gov. John Bel Edwards has largely supported gaming expansion measures, the Republican-controlled House and Senate have not been able to reach consensus on any new legislation. That partially explains why this year’s crop of bills takes the initial onus away from politicians and instead to voter referendums.

Still, sports betting backers returned to the statehouse Monday without the aid of former Senate Majority Leader Danny Martiny, one of the Louisiana State Legislature’s most vocal supporters of legal wagering.

For the 2020 session, the entrenched political opposition is overshadowed by the state’s economic hardships. Legislative staff are already projecting the economic downturn from the COVID-19 outbreak will dramatically alter the state’s expenditures and revenues, even before its full impact is known.

Some gaming industry observers believe budget shortfalls could cajole otherwise recalcitrant lawmakers into support for any new revenue stream, but the millions in new sports betting tax dollars for coming fiscal years would be, even in a best-case scenario, a miniscule part of the state’s roughly $30 billion annual budget.

The looming financial difficulties are themselves dwarfed by the health crisis wrought by the coronavirus in Louisiana, which has had the second-most per capita deaths attributed to the virus of any state. That total includes Rep. Reggie Bagala, who passed away in April from COVID-19. Lawmakers already suspended the session due to the outbreak and it remains a threat to its day-to-day operations.

Its with those obstacles the latest sports betting bills begin their long legislative journeys. Here’s the details of the four bills set for a first round of discussion in the Senate committee Tuesday.

SB 130

The most limited of the trio of sports betting bills, Sen. J. Cameron Henry’s bill would place the question of legal wagering on the November 2020 ballot. Voters statewide would be able to approve or reject sports betting in their home parishes. A simple majority is all that would be needed to technically legalize betting in that parish.

If Henry’s bill is passed, and assuming voters in at least one parish approve sports betting, legal wagering couldn’t begin until a subsequent bill outlining key regulations, tax rates, purveyor access and a host of other issues is enacted by the legislature. Unlike the other two bills, it also doesn’t clarify if sports betting would be limited to retail sportsbooks at casinos or if it would be available through mobile devices in all parishes that approve it.

Though SB 130 lacks the critical legislative framework for legal betting, it would likely be the easiest to pass of the current sports betting bills since it punts approval to the voters and leaves the more difficult details to a future session. Assuming popular support from voters, it could affirm to wavering lawmakers their constituents’ support for sports betting when they take up the ensuing bill in 2021.

The parish-by-parish votes would also keep sports betting out from those that don’t want it, which could assuage fears of lawmakers that would prohibit gambling within their communities but would support the new revenue stream.

SB 332

Like SB 130, Sen. Barrow Peacock’s bill also puts sports betting before voters in this November’s elections, but only in parishes that already have full-scale gaming facilities: Bossier, Caddo, Calcasieu, East Baton Rouge, Jefferson, Orleans, St. Landry and St. Mary. However Peacock’s bill lays out much of the major legislative framework for legal sports betting in any parish with majority voter support.

SB 332 specifically prohibits statewide mobile sports betting, permitting internet-based wagers only from the confines of an authorized casino or horse track. This largely mirrors the structure of legislation in Mississippi, one of the first states to approve legal wagering. Since Mississippi took its first bet in 2018, sports betting backers in the Louisiana legislature have used the sports betting dollars crossing state lines as a major impetus for approval in their state.

The more fleshed out legislation further directs oversight to the Louisiana Gaming Control Board, which would then have the power to promulgate regulations necessary for sports betting to begin. However, the bill doesn’t specifically mention tax rates, a core aspect that can drastically impact operators’ revenue margins and is usually determined by elected officials.

Aside from the ban on statewide online bets, which makes up as much as 90% of wagering handle in more mature markets, SB 332 follows along with the structure of the more than 20 other states to pass sports betting bills. Like most other states, bettors must be age 21 or older. The bill also lays out standard restrictions against athletes, officials and other affiliated parties from placing bets.

However, it doesn’t allow eSports wagering, which has become a more popular with the dearth of in-person sporting events during the pandemic, but does permit betting on college sports. This could be especially significant in Louisiana where college football, and the Louisiana State University team in particular, is incredibly popular.

SB 378

The bill from Sen. Ronnie Johns, a leading pro-gaming voice in Baton Rouge, largely matches Sen. Peacocks’ proposal, but places the sports betting referendum question on every voter’s ballot.

Like Henry’s bill, SB 378 would allow opposed parishes to opt out of sports betting. But it would also open the door for more parishes to approve sports betting than would Peacock’s proposal. Johns’ bill also doesn’t allow statewide mobile betting, but it could, in theory, create an avenue for parishes that approve sports betting to open up a retail sportsbook outside a casino or horse track if lawmakers were to approve a bill in the future to do so.

The parish-level approach could also help outline a later effort to approve online sports betting. Like the daily fantasy ballot measure, those games could only be accessed at parishes that approve them. Should an online authorization bill pass, it could follow on the results of the referendum and only allow mobile wagering from within approved parishes.

Realistically, only one of the two bills will advance out of the legislature – lawmakers won’t approve both a statewide and a parish-by-parish ballot question. It remains to be seen if elected officials will side with one bill over the other, or if they will look to combine the two pieces of legislation under a statewide or parish-level referendum.

SB 331

Another bill from Sen. Peacock, this measure codifies daily fantasy regulations. For DFS supporters, SB 331 represents the latest push for an infuriating series of legislative shortcomings.

Louisiana remains one of just a handful of states where top DFS companies such as DraftKings and FanDuel don’t operate – even though 47 of 64 parishes approved the games in 2018. A ballot measure that year was, after years of legislative battles, finally approved for the 2018 midterm elections. It was approved by a vast majority of voters and a sizeable majority of the parishes, including the 10 most populated.

But the referendum, similarly to Sen. Henry’s 2020 sports betting bill, required the legislature to finalize the regulations for DFS before it could begin. The overwhelming popular support made this seem like a straightforward task when lawmakers returned for the 2019 session, but conflicts over sports betting helped obfuscate and eventually thwart the bill before it could pass into law before the session expired.

The sports betting question remains unsettled, creating another potential obstacle for the long-awaited DFS regulation measure. But with Louisiana one of the few states without these games – despite lopsided support from its voters – it appears the legislation to finally legalize DFS still has good odds.

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