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A Senate study committee will convene in early October to consider introducing internet gaming legislation during next year’s legislative session, in order to shore up Louisiana’s fragile budget outlook.
Senate Resolution 149, passed in the final days of the legislative session in Baton Rouge in June, requires the Senate Judiciary B and the Revenue and Fiscal Affairs committees to meet jointly and report their findings on the potential legalization of iGaming to the Senate no later than March 1, 2025.
The Louisiana legislature will reconvene on April 14 with adjournment scheduled for no later than June 12, giving lawmakers about two months to consider any iGaming bill that is ultimately introduced as a result of the upcoming study.
“I'd say the chances are less than even on approval and probably a lot less,” said Ronnie Jones, a gaming regulatory consultant and former chairman of the Louisiana Gaming Control Board (LGCB).
“The study committee is going to bottom line the initiative as a ‘fix’ for the looming budget cliff,” Jones told Vixio GamblingCompliance. “But this is a much more conservative legislature and there is still deep-seated suspicion of any type of internet-based gaming.”
Louisiana is expected to have at least a $400m budget shortfall next year as a 0.45-cent added sales tax will expire on July 1, 2025. The temporary sales tax increase was implemented in 2016 as a full cent tax and was reduced in 2018.
“Sports betting wasn't an easy lift, and this will be twice as challenging,” Jones told Vixio. “The brick and mortar properties are clearly struggling in some areas and there will be very real questions about cannibalization of their customers.”
Jones added that questions about cannibalization “can have a real impact beyond the gaming operator” to the thousands of gaming employees and non-gaming vendors “who might well see this move as a potential encroachment on their livelihood”.
Currently, retail and online sports betting is legal in 55 of the state’s 64 parishes.
Other legal forms of gaming regulated by the control board in Louisiana are land-based and riverboat casinos, fantasy sports, video poker machines at establishments with a liquor license, historic horseracing machines (HHR) at off-track betting locations, and slot machines a racetracks.
Legalizing online casino games in Louisiana will require voter approval similar to sports betting, where voters in each parish decided whether to permit sports wagering in 2020.
Jones stressed that probably the steepest part of the climb in terms of overcoming opposition will be Louisiana's video poker industry, which sees iGaming as a “real threat to their profitability”.
As of July 31, there were 12,023 video poker machines at 1,387 locations across the state, according to the LGCB.
“Those guys aren't bashful about forming opposition coalitions with other groups, such as the Louisiana Family Forum, a strange bedfellow arrangement if there ever was one,” Jones said. “And I just don't see the stars lining up this year, but then again the Louisiana legislature has surprised me before.”
“Nevertheless, if I were a betting man I don't think I'd be putting any money down on legalization in the near term,” Jones added.
Brendan Bussmann, managing director of the Las Vegas advisory firm B Global Advisors, told Truist Securities that “the study will give a better picture of where iGaming stands in Louisiana and capturing revenue from customers that currently do not game in this way as well as offering alternatives for those that already participate in gaming in Louisiana”.
As state lawmakers start to prepare for new sessions next year, iGaming is expected to be a topic of discussion in those states looking to fill revenue shortfalls in budgets for 2025 and beyond.
Among the usual suspects set to reconsider the issue next year are New York, Illinois, and Maryland. An inability to reach a consensus among key lawmakers in each state stalled several bills looking to legalize iGaming in 2024.
Other potential states on the iGaming bill list in 2025 are Colorado, Indiana and Iowa.
“iGaming has always been about a longer conversation and each conversation, as we saw with sports betting, will be different by each jurisdiction as this is a states’ issue,” Bussmann told Vixio.
“In some cases, this will be delayed because it has to go to the ballot. But in other cases, it may be expedited because of the need for revenue generation.”
Bussmann said making progress on passing iGaming bills “will be about having a consistent message and educating lawmakers and other stakeholders about the benefits and disputing some of the noise and misinformation that has come up to try to kill previous bills”.
