What Does The Future Look Like For Louisiana Sports Betting?

With mobile now in place, mature market could bring in $50M in annual tax revenue
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Mobile sports betting launched at 8 a.m. local time Friday in Louisiana, giving most Bayou State customers (55 of 64 parishes approved mobile wagering) a chance to place their bets online a few weeks ahead of Super Bowl Sunday. 

Among the operators expected to launch mobile sports betting options are Boyd Gaming (FanDuel), Caesars, and Penn National Gaming (Barstool Sportsbook), each of which has a significant presence within the state. All told, Louisiana could end up with about 40 online and retail sportsbook offerings, as each of the state’s 20 brick-and-mortar locations are given up to two skins.

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The launch of mobile sports betting comes shortly after the launch of retail sports wagering in Louisiana, which took place on Oct. 31. Operators saw notable financial success in November, with the state’s eight retail locations generating $27.6 million in handle. Sportsbooks reported $5.7 million in net revenue, with a hold of 20.6%, and Louisiana received $568,571 in tax revenue from retail sports betting operations in November. 

December saw a higher handle at Louisiana’s retail locations, as three additional sites launched sports wagering during the month. The handle for the month was just under $40 million, coming in at $39.5 million. Net revenue was listed at $4.4 million, and Louisiana received $438,093 in tax revenue. 

Through two months of legal retail betting, Louisiana has received just over $1 million in tax revenue from operators.

With mobile wagering entering the mix – the American Gaming Association (AGA) told US Bets that about 85% of legal sports bets nationwide are placed digitally – expect many of those numbers to climb, although the monthly hold percentages tend to be lower with mobile betting compared to retail wagering. 

Mobile wagering promotions

Many of the sportsbooks launching mobile offerings in Louisiana plan to run promotions for new users. It’s worth noting that Louisiana allows each sports betting licensee to deduct the first $5 million of free or promotional bets from taxable sports betting revenue. 

Among the notable promotions and bonuses from major operators, FanDuel is offering 30/1 playoff enhanced odds, as well as a risk-free $1,000 with your first bet on their platform. DraftKings gives new users a free $100 bet upon signup, while BetMGM offers a $200 free bet. 

Other promotions include DraftKings offering new users a chance to bet $5 to win $280 on NFL playoff games. On Friday, DraftKings is allowing users to bet up to $25 on either team to score a point (boosted to +100) in the NBA matchup between the Denver Nuggets and the New Orleans Pelicans as one of its “no-brainer” promotions. And on Sunday, users can place a bet of up to $25 for former LSU quarterback Joe Burrow to complete a pass (boosted to +100) in the Cincinnati Bengals’ game against the Kansas City Chiefs.

Caesars — which owns four casinos in the state, including Harrah’s Casino New Orleans, and recently slapped its name on the Superdome — is the official casino partner of the Pelicans and the NFL’s New Orleans Saints. It plans to offer the same launch special — a $300 signup bonus and a $3,000 deposit match — that it ran on opening weekend in New York earlier this month.

Don’t dismiss Louisiana’s retail presence

Adding mobile betting to its sports wagering offerings means more tax revenue for Louisiana, and it’s expected that mobile wagering will become the primary form of sports betting in Louisiana. Regardless, expect the retail locations to still find success. 

Some of Louisiana’s neighboring states — Texas, Oklahoma, and Alabama — don’t offer legal sports wagering. While some people from those states may travel across state lines to place mobile bets in the future, others may still visit the state’s retail sportsbooks. 

Mississippi does offer retail betting, but the state doesn’t yet offer statewide mobile wagering. Some of Mississippi’s retail locations allow bettors to use apps to place wagers, but they have to be on casino property. A couple of bills have been filed early this year in Mississippi that are aimed at legalizing mobile sports betting, perhaps a response to Louisiana’s impending launch. 

“Like other states that initially restricted online sports betting, there is already some movement in the Mississippi legislature to loosen those restrictions,” David Forman, AGA’s senior director of research, told US Bets

Given the mobile betting promotions geared toward customer acquisition in Louisiana, there could be some decline in Louisiana’s retail betting revenue in the immediate future. But massive sporting events like the Super Bowl and March Madness figure to provide a bump to retail locations, too. 

Short- and long-term expectations

As for the mobile betting handle in the short term, some of it depends on how many new customers decide to take advantage of promotions. Companies like Caesars, DraftKings, and FanDuel tend to be aggressive in pursuing customer share in new markets, and that won’t change in Louisiana. It’s also worth noting that New Orleans is a popular tourist destination, and people from out of town may place mobile bets while on vacation. 

When it comes to hold, early numbers will likely be swayed by hometown tendencies. Will big bettors back Louisiana teams like the New Orleans Pelicans this weekend? If so, those results could impact the hold in the near future. 

Looking at Louisiana in the long term, US BetsChris Altruda pulled historical revenue data from Indiana and Iowa as comparison points. Louisiana sits between the two Midwestern states in terms of population, and both states also have mobile and retail sports betting. 

Altruda cited data from the first four months of remote betting registration — Indiana included remote registration from its launch in 2019, while Iowa started that on Jan. 1, 2021. Indiana had a retail win rate of 10.3% during those four months, while the mobile win rate was 6.7%. Mobile handle in Indiana during that time was roughly 65% of the total sports betting handle. In Iowa, the retail win rate in the first four months of remote registration was 10.6%, while the mobile win rate was 6.4%, and the mobile handle accounted for 85% of sports bets placed within the state during those four months. 

Louisiana may see similar numbers during its first few months with legal mobile sports betting. Taking a longer view, a 2017 study conducted by Oxford Economics for the AGA estimated that annual statewide handle in a mature Louisiana market could be $5.1 billion.

“Those estimates are for a maturely developed market in the state, which may take several years, as well as the statewide availability of both mobile and brick-and-mortar sports betting,” Forman said.

The study projected $351 million in sports betting revenue generated in a mature Louisiana market. Retail bets are taxed by the state at 10% and mobile wagers are taxed at 15%. Given the estimated figures from the AGA, it’s possible a mature Louisiana market could receive $50 million annually in tax revenue from sports wagering.

Image: Shutterstock

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