Publish Date: 01/28/2022
Fact checked by: Simon Briffa
As Benjamin Franklin famously said, “Nothing is certain but death and taxes” and this is certainly true in the betting world. When Senate Bill 247 was passed and signed into law by Governor John Bel Edwards in 2021, the rules and legislature surrounding LA gambling tax were set. This article takes a look at Louisiana betting tax rates and how that may impact your pocket.
Betting tax is a payment that sportsbooks must legally pay over to the state on betting revenue after winnings are paid out, and in Louisiana the rate currently stands at 10% on betting profits from land-based locations. In-person sports betting only became legal in October 2021 and in the first revenue report from the Louisiana Gaming Control Board it was revealed the eight casinos with sportsbooks took $27.6 million in wagers during November alone! This netted $5.68 million from sports betting for the month and so 10% of that was generated in taxes.
The betting industry in Louisiana is about to shift into top gear, as several Lousiana sports betting sites go live in the next few days, and the betting tax on these wagers is set to be 15% on all online bets. In addition, all potential licensees are required to pay an initial application fee of $250,000.
Just like sportsbook operators are responsible to pay their betting tax over to the state, residents are also responsible to declare tax on their sports betting winnings. The tax regulations vary from state to state, so you need to be sure of the rules that apply specifically to Louisiana.
Gambling winnings are considered a form of income, making them subject to taxation just like other kinds of income, particularly if they are over a certain threshold. So if you win big using your Caesars Louisiana sign up bonus, be prepared to part with a percentage of your winnings.
The flat rate of tax on winnings is currently set at 24%, but there are various thresholds and rules that apply depending on the game you are playing and the amount you win.
Casino winnings have certain thresholds, for example you’re only liable to pay this tax if you win more than $1,200 on slot machines or over $5,000 in a poker tournament. In these instances, the gaming establishment should issue a W-2G form when you win over these thresholds and can withhold 24% of those winnings from you.
Sports betting fans in Louisiana must report all winnings that exceed $600, provided it is 300x your stake. Again, the sportsbook may withhold 24% from your winnings.
If a licensed casino or sportsbook, BetMGM Lousiana for example, does withhold this tax from your winnings, they will issue you the form W-2G, which you then submit with your income tax return. If they do not withhold it, or you have won with an online operator, then you are responsible to report all betting wins in your annual tax return. Louisiana players can also offset their taxes by reporting their losses during the tax year.
Betting should be fun and is a great source of entertainment, but it also comes with responsibility. In the same way that you might ask ‘is BetFred legal in Louisiana?’ when you step into the world of gambling, you also need to be crystal clear on the rules and regulations surrounding betting tax and should seek professional advice if unsure.