Will Louisiana be the next state to launch iGaming? An ongoing discussion on the topic took another step last week in the Louisiana State Senate, as the Senate Judiciary B and Revenue and Fiscal Affairs Committee conducted a hearing on iGaming legalization.
The three-hour meeting featured opinions both for and against the prospect of the launch of an online casino industry in Louisiana.
Offshore presents a tax loss for Louisiana
Those in favor of iGaming legalization pointed out the potential tax revenue the state stands to reap from regulated online casinos. State Senator Kirk Talbot, who initiated the discussion on iGaming legalization in the previous Louisana Senate session, pointed out the issue of U.S. players playing at offshore online casinos and sending untaxed revenue to illegal gambling operations.
“I know several states have legalized internet gaming, cracked down on illegal gaming, and it’s generated an enormous amount of tax dollars,” Talbot said.
Rep. Mike Echols brought up an American Gaming Association Study that estimates Louisana players spending $4.6 billion at illegal offshore casinos each year.
Howard Glaser, the Global Head of Government Affairs and Legislative Counsel at gaming manufacturer Light & Wonder, also cited the AMA study, arguing that offshore casinos siphon potential tax revenue from the state and expose players to the dangers of playing at unregulated gambling sites.
“There are well-documented connections between illegal online gaming taking place in the state and the money that comes from it for money laundering, for drug trafficking, and for organized crime,” Glaser said.
“These are some of the reasons that states consider regulating online casino gaming to protect consumers, combat transnational crime, and capture tax revenue.”
Glaser also referenced a Vixio Regulatory Intelligence study that projected that Louisiana online casinos could produce $763 million in annual revenue. If taxed at 15% (the tax rate on land-based casino slot revenue in the state), that revenue would bring $114 million in annual tax revenue for Louisiana.
The Sports Betting Alliance (DraftKings, FanDuel, BetMGM and Fanatics), Caesars Entertainment, and Boyd Gaming all sent representation to the hearing in support of Louisiana iGaming legalization.
Opponents of iGaming cite responsible gaming, cannibalization
Louisiana is home to more than 25 land-based casinos, including riverboat casinos, racinos, and Native American casinos. Caesars Entertainment and Boyd Gaming own eight of those casinos combined, and both companies advocate for online casino legalization in the Pelican State.
The Cordish Companies also owns a piece of the land-based casino economy in Louisiana, including an upcoming $270 million project that’s slated to open in 2025 (Live! Casino & Hotel Casino in Bossier).
Mark Stewart, General Counsel for The Cordish Companies, pushed against iGaming legalization at the hearing.
“Over $700 million has been invested or committed to move casinos on shore, bringing tremendous economic benefits to Louisiana,” Stewart said. “But we submit that bringing iGaming to Louisiana would pull the rug out from under these projects and discourage additional land-based investments.”
Stewart also contended that iGaming legalization could cannibalize land-based casino revenue. Stewart pointed to a Deutsche Bank study that found an 11.7% decline in brick-and-mortar casino revenue in three states with legal online casinos, compared to a 17.7% gain in revenue in six states without iGaming.
Stewart’s argument against iGaming legalization also brought up potential responsible gaming pitfalls. He dubbed online casinos as “gambling fentanyl” and said that gambling helpline calls have increased 335% since online sports betting went live in the state at the beginning of 2022.
Louisiana Gaming Control Board Chairman Chris Herbert also weighed in on the responsible gaming aspect of iGaming legalization.
“One thing to travel to a casino and game, but it’s another thing to do it from your couch,” Herbert said. “Those present real problems. As regulators, that is not lost on us.”
Other entities on hand at the hearing to oppose iGaming legalization included the Louisiana Video Gaming Association, the Louisiana Family Forum, and Cajun Bingo Supply.
What iGaming legalization could mean for the sweepstakes industry
With any potential iGaming launch likely still years away in Louisiana, sweepstakes casino sites offer an alternative for Louisiana players looking for casino-style gaming.
Many sweepstakes casino operators already avoid Louisiana, as it appears on the list of restricted states for a number of the sweeps casinos. Louisiana players can still access some of the most popular sweepstakes casinos, however, and that likely won’t change even if regulated online casinos arrive in the state.
Only three states outright restrict sweepstakes casinos (Washington state, Idaho, and Michigan). Of these states, only Michigan hosts a regulated online casino industry.
In other states with legalized iGaming, sweepstakes casinos co-exist with regulated online casinos. In New Jersey, Pennsylvania, West Virginia, Connecticut, Rhode Island, and Delaware, players enjoy access to both sweepstakes casinos and regulated online casinos.
The Senate Judiciary B and Revenue and Fiscal Affairs Committee hearing on iGaming played out at the same time as the National Council of Legislators from Gaming States (NCLGS) winter meeting in New Orleans.
Sweepstakes casinos were one of the most debated topics at the NCLGS meeting, as the popularity of the gaming format continues to skyrocket.