Louisiana Governor Signs Off 8% Tax Rate on Daily Fantasy Sports

Louisiana Governor Signs Off 8% Tax Rate on Daily Fantasy Sports

Gov. John Bel Edwards of Louisiana signed a tax rate of 8% for daily fantasy sports (DFS) contests. His confirmation will help pave the way for legitimacy for DFS in the state.

House Bill 64 passes

The DFS levy of 8% was suggested by House Bill 64 which directs the revenue collected from the activity towards the Early Childhood Education Fund of the state. The bill passed through the state Huse by an 82-11 vote. The bill was also unanimously approved by the state Senate later. The bill suggests an 8% tax on the net revenue of fantasy sports contests.

Louisiana Governor Signs Off 8% Tax Rate on Daily Fantasy Sports

Louisiana is the fifth-largest gaming market in the US. The state’s revenue sources went through extensive troubles during the coronavirus shutdowns. Louisiana is now looking at new sources of revenue that could help its kickstart it’s economy and solve the revenue troubles of the state. Last month, the commercial and tribal gaming operators of the state laid off about 10% of their total gaming workforce.

To help the industry, lawmakers have approved a tax cut on the gross gaming revenue (GGR) that operators receive from promotional credits. This could bring back demand in the gaming market again. The state’s properties generated a GGR of over $1 billion last year.

The state has been waiting for DFS taxes for long

The state’s voters approved daily fantasy sports in 47 out of 64 parishes in November 2018. However, political uncertainty over the activity led to delays in its adoption. With the governor’s signature, the activity will gain more legitimacy and bring new opportunities for operators like FanDuel and DraftKings. Both companies maintain a duopoly in the DFS market. Both the companies have spent over $1 million on a 2018 campaign to gather support for its legalization measures.

Most parishes that voted for DFS legalization have larger populations like St. Charles, East Baton Rouge, Orleans, St. Tammany, Jefferson, Lafayette, St. Bernard, and others. The proposal was rejected by smaller, rural regions located mostly in Northern Louisiana. Interestingly, the 47 parishes that vote in favor of DFS are home to 92% of the state’s population.

The final stamp of approval for the activity came only after a pandemic and a special legislative session.

sherlock

About sherlock

Sherlock Gomes loves to write and express his views on anything related to Gaming, Gambling, & Casino. He has been covering Gaming for more than two years now.

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