The ‘high stakes’ of fantasy sports betting ballot measure

By Jacqueline DeRobertis and Dwayne Hinton, LSU Manship School News Service

Next Tuesday, Louisiana voters will decide parish-by-parish if they want to let fantasy sports fans compete for cash prizes. The vote, seen by some lawmakers as a way to gauge statewide gaming sentiment, could set the tone for possibly legalizing betting on real sports in Louisiana.

The Legislature voted last spring to hold the fantasy sports referendum even though it has not yet figured out how the state would earn revenue from the contests or how much money they might bring in.

And in a state that remains sharply divided between the economic benefits and social risks of any type of gaming, it is not clear how many parishes will approve it.

“I think a lot of your south Louisiana parishes with a saint in the name tend to vote for gaming,” Greg Albrecht, the chief economist of the Louisiana Legislative Fiscal Office, said. “Catholics have a different attitude about that. The middle or northern part of the state, it’s a little different story.”

In the mid-1990s, for instance, voters in 33 of the 64 parishes – most of them in north and central Louisiana – opted out of installing video poker machines. 

Since then, the state’s tax revenues from video poker, land-based and riverboat casinos and the Louisiana Lottery have soared to $875 million a year, eclipsing oil and gas at over $600 million as the industry that supplies the most tax revenue.

State figures show how gaming has surpassed oil and gas as a revenue source

Supporters say that the fantasy sports contests – in which fans can assemble teams, then track the performance of real athletes and compete with players around the world through apps like DraftKings and FanDuel – could add to the revenue once the Legislature and gaming regulators decide how to structure taxes or fees.

But the big prize could be one step farther down the road.  After a U.S. Supreme Court ruling in May overturned a ban on sports gambling outside of Nevada, Mississippi and several other states moved quickly to legalize sports betting, creating pressure in Louisiana to follow suit.

“It’s naïve to think that by voting down betting or fantasy sports that you’re going to suppress gambling in the state of Louisiana,” said Sen. Danny Martiny, R-Metairie, who has pushed to legalize sports betting here. 

“If somebody has a gaming sickness and they’re going to go over to Mississippi and gamble, and then come back to Louisiana with all the ills of gambling, we’re getting no revenue to treat it,” Martiny said.

The gaming proposals also highlight a long-standing rift among Republican lawmakers. Some who are reluctant to increase income or sales taxes view expanding gaming as a stealth revenue raiser. Other Republicans say the risk of addiction to gambling and other dangers outweigh the fiscal benefits.

“The problem is that the social cost and the misery that it causes to individuals and families, in some people’s minds, like my own, outweighs the income,” said Kathleen Benfield, legislative director of Louisiana Family Forum, which opposes all types of sports betting.

Still, Martiny said, Gov. John Bel Edwards, a Democrat, is the first governor in 20 years who is willing to consider expanding gaming. Martiny plans to file another bill next spring to try to legalize betting on real sports.

Rep. Kirk Talbot, R-River Ridge, sponsored the bill calling for the vote on fantasy sports.

But how much revenue fantasy sports would bring the state remains a mystery. Talbot’s bill did not include guidelines for taxation and regulation, details that will have to be worked out later for any parishes that approve it Tuesday.

An estimate of the revenue right now “would be pure speculation,” Albrecht said. “I don’t know that we could ever make a projection with any kind of number, quite frankly.”

The Louisiana Family Forum – a conservative group that says it defends faith, freedom and family values – and other critics have seized on the uncertainty to try to defeat the fantasy sports measure.

Citing a 2016 study from the University of Louisiana at Lafayette, Benfield of LFF noted that gambling addiction runs high in Louisiana.

“We don’t think that gambling is a good economic engine for our state,” she said. “Just as Louisiana citizens are addicted to gambling, the state of Louisiana – the parishes and municipalities – are addicted to the income that gambling generates for them.”

Martiny disagrees.

“The attitude back in the ‘90s was, ‘I’m opposed to gambling – I think it’s bad,’” he said. “Now, people say, ‘You know what? I’m opposed to it. I don’t want to do it. But if somebody else wants to do it and it reduces my tax burden, let them do it.’”