Louisiana sports betting operators face clear limits on promotional game deductions under a new state law that will take tax effect in July.
Beginning July 1, each Louisiana sportsbook licensee will be limited to $5 million per year in free play credit, regardless of the number of sportsbooks associated with each licensee. Most state licensees only have one sports betting partner, but state regulators say the limit applies whether they have one or two partners in the future.
Clarification comes in 2022 Senate Bill 290, sponsored by Louisiana Senate President Page Cortez, R-Lafayette. The bill was enacted by Governor John Bel Edwards on June 3 after receiving final passage on May 25 by a 90-to-3 vote in the Louisiana House of Representatives.
The provision relates to free bets that sports betting operators offer to new customers to entice them to sign up and make deposits. How income generated from these promotions is taxed differs from state to state.
Keep free play online
Cortez told his legislative colleagues at a committee hearing on May 10 that SB 290 will ensure that non-taxable income is limited to each licensee, not each application.
“We didn’t (planned) $5 million of promotional play per app. It was just for the licensee,” Cortez told the House Committee on Administration of Criminal Justice. on promotional games.
“We didn’t want it to be so…that we wouldn’t end up having no income.”
Sitting with Cortez in the audience was the chairman of the Louisiana Gaming Control Board Ronnie Johns, a longtime Louisiana state senator who resigned his seat last year to become the state’s top gambling regulator. John said The game today in a May 24 telephone interview, sportsbooks have not attempted to claim more than $5 million in free play since sportsbook launched last year – although some licensees have claimed millions in credits promotions during the first few months.
That said, the SB 290 will erase any doubt about the amount of free play allowed in the future, according to Johns.
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SB 290: The “Cleanup Bill”
According to Johns, SB 290 was filed after net state proceeds dropped due to promotional game deductions by licensees shortly after retail launch in 2021 and mobile launch in January 2022.
One licensee, he said, claimed all of his free play within 10 days of the state’s mobile sports betting rollout in January.
Now the net proceeds from sports betting in Louisiana is average. The state has $10 million in sports betting revenue it didn’t have four months ago, Johns said. Much of this revenue was generated from non-taxable promotional games.
But SB 290 — what Johns called “a cleanup bill” — is there just in case.
“This ensures that in the event that a licensee uses multiple providers — they use two providers, for example — they cannot stack them,” Johns said. “It’s just to make sure that each (separate) supplier can’t claim the $5 million in deductions.
“That will be a total of $5 million per licensee regardless of how many vendors they use – whether it’s one or two.”
Louisiana Sports Betting Review
A total of 20 sports betting licensees — including a mix of casinos and racetracks — are licensed under Louisiana’s sports betting law of 2021. Each license holder is entitled to two skins (industry language for mobile applications) for a maximum of 40 licensed sports bets.
However, most licensees are currently associated with only one operator.
Another sportsbook is set to open later this year under the Louisiana Lottery Corporation, bringing up to 41 sportsbooks to the Bayou State.
Sports betting in Louisiana is legal in 55 of the 64 parishes where voters statewide approved legalization by referendum in November 2020. Retail sports betting went live in November 2021, with a mobile launch in January 2022.