Louisiana Governor John Bel Edwards signed a tax bill earlier this week setting the tax rates for the daily fantasy sports (DFS) industry. Most of the state’s parishes voted to legalize DFS in 2018. Lawmakers in the state are typically barred from introducing tax bills during even years, but due to a special session necessitated by the COVID-19 pandemic, Rep. John Stefanski was able to shoehorn H 64 into legislative consideration.
Industry experts believe that this development makes it likely that DFS will be live state-wide by the time the National Football League (NFL) season resumes, which should represent a massive windfall for DFS operators as well as for the Louisiana.
Louisiana’s journey toward legal DFS began in 2018, when 47 of the state’s 64 parishes chose to legalize DFS. The parishes comprise 92% of the state’s entire population. State legislators failed to seize the initiative and largely ignored their constituents’ demands in 2019.
According to Stefanski, many of the issues stemmed from legislators attempting to package DFS with other gambling activities, such as sports betting, which led to the bill not advancing. Legislators were moved to act again on the bill once it became clear that a special session would soon occur.
They removed all unnecessary sports betting terms in the bill and replaced it with language specific to DFS. H357 was passed 76-20 in the Senate and was signed by the governor by June 9.
H 357 named the Louisiana Gaming Control Board (LGCB) as the regulatory body for DFS and asked the LGCB’s board to commence rulemaking procedures by August 1.
Licenses have a validity period of three years and will cost between $5,000 and $40,000, depending on the size of the DFS entity. The bill also stipulates an 8% tax on the net revenues of all DFS contests, which will be directed toward the Louisiana Early Child Education Fund.
Legal Sports Betting Next
Despite warnings that the two-thirds threshold required for Louisiana tax bills would take too long to be achieved, H 64 passed easily, winning 82-11 in the Senate and 36-0 in the House.
State lawmakers are optimistic that Louisiana could soon have legal sports betting as well due to the easy victory of DFS. There are plans to implement sports betting bills next year after the upcoming November election.
