More than 500,000 residents of the Pelican State have created an account with a mobile bookmaker following the legal launch earlier this year of online sports betting in Louisiana, where lawmakers are now pondering addiction and promotion-related tweaks to the law.
Louisiana Gaming Control Board Chairman Ronnie Johns dropped the number on Tuesday as he spoke to a Senate committee considering a sports-betting bill that intends to clarify rules around free bets and other gambling inducements.
“We've identified over 500,000 people who have actually signed up to participate in sports betting,” Johns said. “So we do know that [promotional play] works.”
The numbers game
Louisiana regulators allowed online sportsbooks to launch in the state in late January. The debut followed the rollout of sports wagering at casinos in the state in the latter half of 2021 and the approval of sports betting in general by lawmakers earlier in the year.
Legal online sports betting has clearly caught on in the state, as half-a-million sports bettors are equal to around 10% of Louisiana’s population. The registrations are not coming from the entire state either, as sports betting was approved by voters and is being offered in only 55 of Louisiana’s 64 parishes, which are similar to counties.
There are now seven mobile books that have gone live in Louisiana, including BetMGM, DraftKings, and FanDuel. An eighth, Betfred, has vowed to launch soon in the state.
Johns said Tuesday that there have been “zero problems” to date with the rollout.
“We're very, very pleased with the numbers,” the chairman told the committee. “But I'm absolutely elated over the way that we've rolled out sports betting. It has been done the right way.”
Some tweaks
Even so, there is legislation in Baton Rouge that proposes to refine the state’s approach, which was the reason for Johns' visit to the Senate judiciary committee.
Louisiana Senate President Patrick Page Cortez told members that his bill, SB 290, would allow for information about people who have put themselves on the state's self-exclusion list — banning themselves from casinos — to be shared with online sportsbook operators.
"You could download an app and give your information and they would not know that you have already imposed that on yourself," Cortez said.
If passed, SB 290 could help operators stop people who have requested a gambling break from accessing an online sportsbook app or website. The bill is making its way through the legislature following the recent resignation of a state senator who said in her farewell statement that she had struggled with a gambling addiction.
Another aspect of SB 290 has to do with promos that can be used by bookmakers to reduce their taxable revenue.
The state imposes a 15% tax on net gaming proceeds (total wagers minus winning payouts) from online sports betting. However, operators can reduce their revenue and tax burden by deducting promotional play from their receipts, with a maximum of $5 million in deductions per calendar year.
Numbers from the gaming control board show legal online sports betting in Louisiana added up to more than $457 million in wagering as of the end of March. Net proceeds for operators were roughly $36 million, which made for a hold of 7.9%. Taxes paid by online bookmakers amounted to almost $5.5 million since the launch earlier this year.
Yet Cortez noted to the judiciary committee on Tuesday that Louisiana received zero tax dollars from mobile wagering in January because of the bonus-related deductions.
This caused concern among lawmakers, with Cortez putting forward SB 290, which would have chopped the amount of promotion-related deductions to $500,000 a year.
There has since been a change in circumstances. There were $11.7 million in promo deductions for January and another $10 million applied to net proceeds from online sports betting for February. By March, however, the deductions had fallen to around $800,000.
“There was a concern … that maybe we had allocated too much promotional play, and that the state was in a losing proposition on this,” Cortez told the committee. “What we've seen since I've filed the bill is that there has been a change, and we have started to receive more, and [licensees] won't get another allocation of promotional play that they can apply until next January.”
SB 290 was ultimately reported out of the committee on Tuesday with an amendment that removes the $500,000 passage and leaves the limit at $5 million per licensee. The legislation tries to make the cap even more explicit given licensees can own multiple gaming facilities and partner with up to two mobile sportsbook operators.
The bill still has to clear the Senate and then pass in the Louisiana House of Representatives before it can become law.
Walking a fine line
Johns told the committee that some licensees burned through their $5 million in deductions in an “extraordinary” amount of time, such as one operator that used it all up in less than two weeks.
The chairman said the state gaming board feels it will take a full year of data to fully judge the effects of the state’s rules for promotions, which are still offered by bookmakers that may have already blown through their deduction budget.
Johns also noted there can be a “fine line” between winning and losing in sports betting, and pointed to this year’s Super Bowl.
Plenty of Louisiana bettors backed the Cincinnati Bengals and Louisiana State University products Joe Burrow and Ja’Marr Chase as three-and-a-half point underdogs in the game, which wound up being a winning wager by just a half-point.
“The bettors here in Louisiana had a great day with the Super Bowl,” Johns told the committee. “The win ratio was about 2% across the board of the industry.”
