The Weekender: Louisiana And Taxes; RSI And Delaware; Election Betting
Louisiana lawmakers proposes a sports betting tax hike. Delaware has done a 180 thanks to RSI. More election betting news.
The Bulletin Board
ABOVE the FOLD: A look at the three biggest stories of the week.
— Louisiana’s foray into higher sports betting taxes.
— RSI has turned around the Delaware online gambling market.
— A little more on election betting.
HOUSEKEEPING: A look at recent podcasts, featured articles, and more from yours truly.
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Louisiana Briefly Considers Raising Taxes on Sports Bets
Louisiana is holding a special session, and one of the ideas floated right out of the gate was raising the state’s sports betting tax rate from 15% to 51%.
State Rep. Roger Wilder introduced the legislation, HB22, last week as part of a special session called by Gov. Jeff Landry to try “to fix our broken tax code and bring economic prosperity to Louisiana.”
After a not-so-short hearing, Wilder withdrew the bill but not the idea.
“The good news is that Rep. Wilder voluntarily deferred the bill during a hearing on Wednesday. Wilder said he plans to learn more about the industry and come back with an amended bill that increases the tax rate to something less than 51%.”
And here is why I suspect these efforts will continue in Louisiana and across the country:
“Put bluntly, there is zero downside for a lawmaker pushing for higher taxes on a “sin” industry. Outside of a tiny sliver of bettors who are concerned high tax rates will lead to worse odds and fewer promotions (not exactly a winning argument for the masses), the general public is not going to cry over gambling firms paying a higher tax rate. Especially if that money is earmarked for essential services.
“The industry can scream “BLACK MARKET” until it’s blue in the face, but as I’ll describe in a minute, that yelling isn’t getting them anywhere.
And later in the column, I noted that bad policy is sometimes the point:
“I’d also caution the industry that what it is calling bad policy (tax rate increases, prop betting bans) is a feature, not a bug, for many lawmakers and groups who simply oppose gambling.”
“Case in point: "I can't stop it [sports betting]. If I could, I would," Louisiana State Rep. Les Farnum (R-33) said during Wednesday’s hearing.
“So, what’s the next best thing to stopping gambling? Kneecapping it.”
RSI Radically Improves Delaware Online Gambling
Without revisiting the full entry from Thursday (you can read that here), RSI’s performance in Delaware can be explained in two charts:
DraftKings + Election Betting… If It’s an Option
Two election betting items appeared in the newsletter this week as I looked at comments from DraftKings CEO Jason Robins on the opportunities in election betting:
“The market within that that's dominant is election markets, of course, particularly during presidential elections. So I know there's been a lot of attention on it over the last few weeks.
“And I do think there could be a place for it outside of elections, but that's really where the interest seems to be now from a customer demand side.
“So, it's definitely something we're looking at in advance of the next presidential election, and potentially, there will be an opportunity to look at something sooner.”
I also offered some thoughts on whether or not election betting will be around for very long, considering the CFTC is appealing the court ruling and the possibility of Congress stepping in and rewriting the laws.
Housekeeping
The Forecast is a premium service that provides quarterly reports and weekly updates on the US online gambling sector. I created it specifically for individuals and organizations interested in an unbiased, clear-cut assessment of the landscape.
It will launch in November, costing $2,600 annually (just $50 per week).
Reach out here for more details or to register your organization for The Forecast.
PODCASTS:
The Talking Shop Podcast was on a break this week, but a new episode will be released this week.
COLUMNS:
The RUDDOCK REPORT: The latest installment of the Ruddock Report (my monthly look at the state of online casino legalization in the US) is now available at Casino Reports. This month, I examine some efforts overseas, offer two trends to watch, and zoom in on the state of Ohio to see if there is any “there” there.
This week’s featured column delved into the recent effort to raise Louisiana's sports betting tax rate and why I expect these efforts to continue in 2025 and beyond.
Why hire Steve Ruddock? Over the years, Steve has advised startups, national gambling companies, government agencies, and investment banks on a wide variety of topics.
Whether you’re looking for market research, want to raise your brand awareness, or are trying to develop responsible gaming strategies, Steve can help with honest, balanced, no-nonsense analysis of the situation.
Steve’s unique experience and insights are often the missing piece to the puzzle.
Reach out for more information: Straight to the Point Consulting.