Louisiana Senate Approves Sports Betting Bill

Louisiana Seeks “Level Playing Field” with Mississippi Sports Betting; Senate Approves Bill

Louisiana is on track to allow legal sports betting after the Senate voted 24 – 15 to send a bill to the ballot in October. The Tuesday vote approved SB 153 which aims to create a level playing field with neighboring Mississippi’s sports betting market.  The bill now heads to the Louisiana House where it faces a tougher battle. Hurdles facing the bill include opposition by conservative Christian legislators.  If SB 153 becomes law, it will be one of the biggest gambling expansions seen in Louisiana in decades.

The proposal was sponsored by Senator Danny Martiny (R-Kenner) and is modeled on policies that currently exist in Mississippi, albeit more restrictive.

Ronnie Jones of the Louisiana Gaming Control Board said the earliest date that the state could see sports betting in place would be in the first half of 2020.

What is Louisiana SB 153?

Firstly, it’s important to say what SB 153 is not. It will not automatically permit sports betting in the State of Louisiana. Instead, it will take the question to the October 12, 2019 elections. Each parish (county) will determine if it wants sports betting to be allowed in its jurisdiction. The question will only be taken to parishes where casinos and race tracks already exist.

Highlights of SB 153 include:

  • If a parish gives the green light to sports betting, residents will be allowed to wager on professional and collegiate sports.
  • Betting would be restricted to Louisiana’s four horse tracks that offer slot machines, as well as Harrah’s Casino in New Orleans and 15 riverboat casinos.
  • No betting on high school, video game and electronic sports events will be allowed.
  • Sports betting will be confined to participating casinos and horse tracks.
  • No sports betting below the age of 21.
  • Casinos and horse racing tracks will apply for licenses through the Gaming Control Board.
  • 1% of net proceeds will be earmarked for programs to fight compulsive gambling.
  • The majority of the proceeds will go to early childhood programs.

More Restrictive Than Mississippi

One of the main reasons for the proposal is concern that Louisiana casinos and racetracks will begin losing business to sports betting operations that are gearing up in Mississippi and Arkansas.

Sen. Martiny told Nola.com: “It’s a simple thing trying to allow us to compete on a level playing field.”

He also told Fox8Live.com that the Mississippi Gulf Coast casinos are doing everything they can to lure Louisiana citizens over to the Biloxi area, and one of the amenities they offer is sports betting.

However, the senator said that his proposed bill was more restrictive that what can currently be found in neighboring Mississippi.

“Mississippi has mobile gaming in their casinos but what happens is they allow it anywhere on the premises,” he explained. “My bill will restrict it to where if you are going to do mobile gaming you either have to be on the gaming floor of the facility or somewhere off the premises where you have to be 21 years of age to be there.”

SB 153 Faces Opposition

Although SB 153 passed through the Senate with a good majority, it doesn’t mean that things will be plain sailing from now on.

Critics argue that legal sports betting will worsen the problem of compulsive gambling in the state.  Opponents have brought personal elements into their arguments, such as Senator Karen Carter Peterson of New Orleans who divulged recently that she suffers from a compulsive gambling addiction and wants to spare others the same fate.

However, Martiney says that one can’t overlook the enormous financial advantages there are to be had by making sports betting legal in the state.  Analysts expect the industry to generate around $50 million a year depending on the tax structure.  Around 1% of the sum or $500,000 of those proceeds (whichever comes first) would be directed to compulsive gambling programs.

It should also be noted that Governor John Bell Edwards has publicly stated that he would support any type of sports betting bill that reaches his desk.

Lawmakers may also move to support the bill based on the enormous success that Mississippi Gulf Coast casinos are having with legal sports betting.

Those casinos posted impressive numbers, winning nearly $8.4 million last month in sports betting revenues. That was their second-highest month since March Madness month.

Sports betting will also boost the state’s economy by attracting people to hotels, who will then in turn gamble at the casinos and eat at on-site restaurants.

Despite Louisiana being a state that tends to shy away from any changes to its gambling industry, lawmakers may be willing to overcome their concerns if they can be convinced the extra funds will be helpful for preschool program funding. Louisiana is set to lose its federal funding for these programs.

Louisiana Residents Already Bet on Sports

It’s no secret that over half of Louisiana residents support legalizing betting on sports, as was shown in a recent LSU survey from earlier this year.

“Like it or not; it’s here,” said Sen. Martiney about sports betting in a state known locally as the Sportsman’s Paradise. “And it’s going to be here whether we legalize it or not.”

“We get not one penny from the offshore sites. We get not one penny from Mississippi. We get not one penny from the bookies,” he said. “This is an industry that is already operating at full speed here in Louisiana. It’s totally unregulated. We get all the ill of gaming and we got none of the benefits of the money.”

Also, in the November 2018 vote, 47 out of Louisiana’s 64 parishes gave the green light to Daily Fantasy Sports. Campaigns by Draftkings and FanDuel proved to be successful, and if the question of sports betting comes to the October 2019 vote, it should be expected the two DFS giants will come out to lobby just as forcefully.

The Question of Tax

There is currently separate legislation under consideration in the Louisiana House which would set up the tax rates of SB 153.  House Bill 587, sponsored by Rep. Joe Marina, may not be able to breeze through the way Martiney’s bill did. For SB 153 to receive Senate approval, it only needed a majority. However, tax bills have to receive a 2/3 majority in the House in order to pass.

Martiney supports a 12% tax rate and application fees similar to those paid by operators in Mississippi.