Online Gaming Has Backing of Louisiana Voters. Now It Needs Rules

In November, voters approved online fantasy games for cash prizes in 47 of the state’s 64 parishes. Now, lawmakers need to iron out the details when it comes to the rules that govern the games.

by Will Sentell, The Advocate / April 8, 2019
Shutterstock/Wpadington

(TNS) — In November, voters in nearly three out of four parishes in Louisiana voted to legalize online sports fantasy games for cash prizes.

Now comes the all-important push in the Legislature, where battle lines are already taking shape, to spell out rules for the games.

State Rep. Kirk Talbot, R-River Ridge, who sponsored the ballot measure approved by 47 of the state's 64 parishes, downplayed the issue.

"It is just mundane policy stuff," Talbot said.

He said he remains optimistic that the games will be ready to go by the 2019 football season.

But Gene Mills, executive director of the Louisiana Family Forum, said how much the state collects from sports fantasy firms and other issues deserve scrutiny.

"We are watching very closely to how the rules are promulgated and the concerns that it brings to the state of Louisiana," said Mills, whose group opposed the 2018 ballot measure.

Officials of the Louisiana Family Forum say they advocate for traditional family values.

The change won approval in most of the state after a $1 million campaign largely bankrolled by the two major sports fantasy companies — DraftKings and FanDuel.

It won by lopsided margins throughout south Louisiana, including 61% in East Baton Rouge Parish, 73% in Orleans Parish and 69% in Jefferson Parish.

What voters in 47 parishes endorsed will allow sports enthusiasts, using computers and smartphones, to craft teams of players from major sports, pay an entry fee and pursue cash prizes based on how those players perform in actual games.

Three bills have been filed to spell out the rules to govern the games.

All three will face scrutiny during the legislative session that starts Monday.

Talbot has filed one of the proposals — House Bill 459.

House Ways and Means Committee Chairman Neil Abramson, D-New Orleans, has filed two others on the topic — House bills 495 and 500, which also deals with sports betting in case it becomes reality.

Efforts to legalize sports betting will be a separate, and likely more volatile, debate.

In one of the key issues, Talbot has proposed taxing fantasy sports firms 10% of net revenue.

Talbot said he arrived at that number by checking tax rates in other states.

"And that is subject to debate," he said.

"That is not hard, chipped in stone," Talbot said. "I don't want to be the most onerous."

Abramson has proposed an 8% tax rate on net revenue.

He said that is based on the rules in Mississippi, which has both online fantasy sports and sports betting, and is drawing Louisiana residents for both.

Mills says both the 8% and 10% proposed rates are too low.

He said truck stops that offer video gambling are charged up to 32%.

"And we make them prove they are a legitimate Louisiana enterprise," Mills said.

"So we are dealing with a huge disparity that I am pretty certain is going to bring out the ire of other gaming interests in the state."

Under Talbot's bill, sports fantasy firms licensed by the state would pay the board an annual fee of $10,000 compared with $5,000 proposed by Abramson.

Abramson also wants to split the 8% tax revenue between the state treasury and early childhood education, which is suddenly a hot topic.

He said that, while he would prefer to overhaul Louisiana's financial structure, efforts to do so have failed and it makes sense to address a longtime need — early education — with some of the proceeds.

How much online sports fantasy games will generate is unclear.

Legal sports wagering has been estimated to raise about $62 million per year in Louisiana.

Online games will raise less than that.

"I think it is premature to really have a firm idea what the number will be," Abramson said.

Other issues are likely to swirl around the debate.

Under the plan, voters in the 17 parishes that rejected the proposal are supposed to be kept from doing so through technology called geofencing.

Talbot noted that online sports fantasy games are well established around the country, including how to limit those who take part.

"It is working in other states," he said of the technology.

Mills said the state has nearly 200,000 gambling addicts and that he hasn't "seen a valid case made for effective geofencing."

"If you make access easier and virtual and unlimited you are going to see the social fallout go way up," he said.

Talbot disagreed.

"A lot of people are familiar with fantasy sports," he said.

"I don't even think they consider it 'gambling.' People are not blowing a lot of money on fantasy sports."

©2019 The Advocate, Baton Rouge, La. Distributed by Tribune Content Agency, LLC.

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