December 8, 2019

December 06, 2019

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Will Louisiana Be the Next Southern State to Permit Sports Wagering?

The 2019 session of the Louisiana Legislature began on April 8. Senator Danny Martiny (R-Metairie) has pre-filed a bill which would authorize sports betting on a parish-by-parish basis in the same way that daily fantasy sports (DFS) was legalized last year.

Even though the Louisiana Senate Judiciary B Committee was the only place in the Louisiana Legislature where sports wagering received a positive vote in 2018, things may be different this year.

Why? First of all, the US Supreme Court opened the door when it struck down the Professional and Amateur Sports Protection Act in May 2018, and now sports wagering is sweeping the country. And Louisiana already has legal casino gaming in the state. In fact, in 2018 Louisiana authorized DFS, and the voters in local referenda approved DFS in 47 of the state’s 64 parishes. So we know the Louisiana population is open to legal sports betting options.

But there is another, perhaps more important reason a sports wagering bill may pass this year. Louisiana’s neighboring state of Mississippi now offers legalized sports wagering, and while there is little hard data to support the notion that legal sports wagering in Mississippi is diverting traditional Louisiana casino customers to Mississippi, the anecdotal information and the general feeling in the gaming industry indicate that the casinos in South Mississippi are gaining customers from Louisiana who wish to make legal bets in the Mississippi sports books. Thus, legalizing sports wagering in Louisiana may be seen by Louisiana legislators, regulators, and casinos as a defensive measure to keep those gaming dollars at home.

Even if the Louisiana Legislature approves sports wagering this year, a statewide voter referendum will be required. Such a vote would probably take place on October 12, the same date as elections for Louisiana statewide and legislative offices. The referendum requirement will delay legal sports betting in Louisiana until at least 2020.

The Louisiana regulators will need time to promulgate sports betting regulations and investigate providers of sports wagering services. The taxation of sports betting will be the subject of separate legislation, and a tax rate of 12 percent, the same as in Mississippi, is anticipated.

The American Gaming Association has estimated that annual revenue from Louisiana sports wagering, or “handle,” might be as high as $288 million. Net revenues from that activity would of course be less, and gross gaming tax revenues to the state might not be significant (if the Mississippi experience is any guide).

However, adding the sports betting amenity to existing casinos, racetracks, and off-track betting facilities in Louisiana could help stem the flow of sports wagering gamblers from that state to Mississippi.

Those companies interested in sports wagering in Louisiana should closely monitor developments in the Louisiana Legislature this year.

© 2019 Jones Walker LLP

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About this Author

J. Kelly Duncan, Jones Walker Law Firm, Gaming Attorney
Partner

Kelly Duncan is a partner in the firm's Admiralty & Maritime Practice Group and a past member of the firm's Board of Directors (2006-2014). He is head of the firm's Gaming practice.

Mr. Duncan has more than 35 years of experience handling admiralty, maritime, and international and customs law matters. His maritime practice includes both domestic and international matters relating to marine acquisitions, financings, vessel construction, regulatory issues, maritime lien enforcement and foreclosures, contracts of affreightment, terminal tariffs...

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Thomas Shepherd, Gaming Attorney, IAGA President, 2014, Jones Walker Law FIrm
Partner

Tommy Shepherd is a partner in the firm’s Business and Commercial Transactions Practice Group. As an accomplished gaming attorney, he served as President of the International Association of Gaming Advisors (IAGA) in 2014.

Tommy represents major casino companies, Native American tribes, manufacturers, suppliers, and financial institutions regarding all matters relating to the development, financing, licensing and operation of gaming and resort facilities. His extensive experience in such matters includes public-private leases, financings, land use approvals, statutory and regulatory interpretation and compliance, gaming operations, and administrative hearings. He regularly serves on panels and speaks at national and international gaming conferences. Mr. Shepherd’s clients include many of the largest gaming operators, gaming equipment manufacturers, suppliers, and tribal operators in the world, as well as major private equity and investment banking firms and large commercial lenders involved in secured and unsecured lending, and debt offerings and bond offerings in connection with the development of various gaming projects.

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