This year was a brutal one for the communities of sports bettors and fantasy sports players in the state of Louisiana. The legislature failed to approve both activities, in what was once looking to be a promising year for the Pelican State. Consumers who choose to bet will be forced to continue to turn to the black market to do so.
State voters last fall approved online fantasy sports, but state policymakers needed to pass legislation to implement the will of state residents. In the wake of the referendum, it looked like the successful vote would pave the way for Louisiana to also cross the finish line on sportsbooks in 2019.
Last Thursday, the legislature dropped the ball on passing legislation to implement what voters approved, as well as authorization of traditional sports betting. According to a report from the Shreveport Times, state officials say that Louisianians will more than likely have to wait two years before being able to play fantasy sports legally over the internet, thanks to the legislature only being allowed to approve tax bills in odd-numbered years. The governor could speed up the process next year via a special session.
Fantasy sports and traditional sports betting, effectively separate issues at one point, became intertwined during this year’s session. That ended up killing online fantasy sports regulation.
‘A sad day for all Louisianians’
According to the trade group Fairness for Fantasy Sports Louisiana, nearly 850k Louisianans voted in favor of the November referendum to allow for fantasy sports. DFS was approved in 47 of the state’s 64 parishes. The parishes that approved DFS account for more than 90% of the state’s population.
There was plenty of outrage over what transpired during the final day of the legislative session last week.
“Today is a sad day for all Louisianians,” Ryan Berni, spokesman for the group, said last Thursday. “Voters should be outraged as it has been made abundantly clear that the legislature is broken. Senators allowed personal politics to prevail, rather than the desires of the people they claim to represent.”
He continued: “What’s most discouraging is that the members who were appointed to the conference committees came from districts that overwhelmingly voted to permit fantasy sports. The question we now have to ask ourselves is, what is the point of having an election on issues if the legislators we send to Baton Rouge to create the appropriate regulatory framework and tax structure refuse to do so? What we need are elected leaders who actually vote for laws that their constituents want.”
Louisiana was seeking to join more than 40 other states that allow fantasy sports, the group said.
Prior to last week’s fiasco, state officials were considering an amendment to the bill that would have restricted DFS to brick-and-mortar facilities. According to the Advocate, the controversial amendment was added by the Louisiana Video Gaming Association, which lobbies for facilities that are worried about the competition from legal online DFS. That amendment was ultimately defeated.
Louisiana moves daily fantasy sports regulation bill forward, drops language limiting DFS to physical locations only https://t.co/PT8Zscib4h
— Sports Handle (@sports_handle) May 22, 2019
A win for the Louisiana casino industry?
If there were losers from fantasy sports regulation stalling, then there must be winners. Louisiana is home to 20 commercial casinos, including properties from world-class gaming companies such as Caesars Entertainment, Boyd Gaming, and Eldorado Resorts, among others.
The state’s casino market is a stagnant one, with gaming win of $2.56 billion in 2018 representing a mere 0.01% uptick over 2017. Nationwide casino win was up 3.46% last year. The Pelican State is a very mature market, relative to other casino states. Sports betting represents an attractive opportunity for the state’s casino industry. The state’s commercial casinos also compete with five tribal casinos, as well as almost 13,000 electronic gaming devices at about 1,600 locations such as bars, restaurants, truck stops, and off-track betting parlors, according to the American Gaming Association’s annual “State of the States” report. Per the AGA, total statewide revenue from those gaming devices in non-casino locations was $595.7 mm last year, up 3.4% over 2017 and far outpacing casino industry win.
DFS regulation in Louisiana would have allowed sports betting operators DraftKings and FanDuel into the market to gather customers ahead of traditional sports betting. Both companies are dominant players in the regulated New Jersey sports betting market. That’s not the ideal scenario for Louisiana casinos. The DFS giants also recently suffered a setback under Illinois’ recently approved sports betting bill.
Did the Louisiana casino industry play any role in helping delay DFS regulation? It’s certainly possible.
This appears to be a pretty big win for / savvy lobbying move by some of the LA casinos. Effectively ensures that DraftKings and FanDuel will not be able to advance market (ahead of LA sports betting legalization) for the next little while. https://t.co/ScS2Poj7UP
— Chris Krafcik (@CKrafcik) June 6, 2019
It’s worth noting that Louisiana’s sports betting bill this session would have only allowed b&m sports wagering, but policymakers in the state have indicated that they are aware that online/mobile regulation is important for any state’s industry. Louisiana is a state that will more than likely approve retail sports wagering first, with future legislation potentially expanding it to online/mobile on a parish-by-parish basis.
Louisiana is a complicated state in terms of the politics surrounding gambling expansion. At a sports betting hearing in October, it was said that putting new seat cushions in Louisiana casinos would be considered an expansion of gambling by the state’s anti-gambling contingent because it might mean that more people show up to play. Not only is the gaming market ultra-competitive, but there are plenty of people with political capital in the state who morally oppose new forms of gaming.
The Pelican State is one to watch on the sports betting front in 2020, but in the wake of the chaotic push in 2019, one would have to consider the state an underdog to legalize retail sports wagering next year.