For a state that has only two Fortune 500 companies, routinely has to make budgetary cuts to education and healthcare, and is facing a $648 million deficit for the next fiscal year, it seems any windfall that it could take advantage of would be a no-brainer. But, alas, Louisiana, on the bad end of almost every 50-state ranking imaginable, doesn’t have the legislators willing to move on decisions that could improve the state of the state.
An opportunity for an influx of cash fell into the state’s lap on Monday when the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) a 1992 federal ban on legal sports betting in the United States, except Nevada, which was grandfathered into the law, saying it violated constitutional provisions in the 10th amendment, which protects states rights to govern themselves.
The ruling stemmed from a six-year fight between New Jersey and the nation’s major sports leagues, including the NFL, NBA, MLB, NHL, and NCAA, which argued the integrity of their games might be impacted by legal sports gambling.
Gaming research firm Eilers & Krejcik’s has estimated that approval by all 50 states could generate as much as $245 billion in wagers and $15.8 billion in revenue. The firm believes New Jersey could conservatively see $250 million in sports betting revenue a year.
On Tuesday, Sen. Danny Martiny, R-Metairie, presented Senate Bill 266, which would have legalized wagering on sports at the state’s 16 casinos and riverboats if approved in a November election in parishes where those casinos operate. He argued sports betting could add $25 million to $40 million a year to state coffers.
The Senate Judiciary B Committee approved the bill two weeks ago, but the Senate Finance Committee rejected it this week in a 6-3 vote after opposing members said they were worried the bill expanded gambling and against a one-time $25 million investment in a centralized computer system needed to track the betting.
With all due respect, the move smacks of hypocrisy, if not outright stupidity. This session the legislature is considering allowing floating casinos to operate on land, the move of a riverboat casino from Bossier City to Tangipahoa Parish, a 30-year, no-bid extension on Harrah’s exclusive state contract, and it has already approved a bill, 67-23, to legalize online fantasy sports – a gambling gray area – by websites like FanDuel and DraftKings.
“It’s the only industry that we do everything to thwart their success and they are one of the biggest money generators in the state,” Martiny said to Nola.com. “Anybody who thinks that killing my bill is going to stop sports betting, you can go right now on your phone or on your computer and place a bet. We’re just not going to get any of the money from it.”
The American Gaming Association estimates that Americans illegally wager about $150 billion on sports each year.
But while Louisiana isn’t ready to replace illegal sports gaming with a regulated and taxable alternative, Mississippi has already left the gate. In anticipation of the Supreme Court rejecting PASPA, last year Mississippi legislators legalized sports betting, and its casinos on the Gulf Coast and Mississippi River could begin taking wagers in less than 60 days. So on top of losing gaming business, it is expected that bettors from the Pelican State will flock to the Magnolia State to place bets, eat, drink, stay the night, top off their vehicle’s gas tank, and spend money in other assorted ways.
On Wednesday, Gov. John Bel Edwards said the state should consider legalizing sports betting, but he wanted more time to review provisions. The current regular session is expected to end this week, and he did not want it included in the upcoming special legislative session, expected to begin next week, to focus on taxes and shoring up the state’s budget.
Louisiana is hurting. It is home to only two Fortune 500 companies, which ranks companies according to their annual revenues for their respective fiscal year, Monroe-based CenturyLink (No. 160) and Entergy New Orleans (No. 263). Like many oil and gas related companies before them, Tidewater announced last week it was moving its headquarters from New Orleans to Houston. Already, legislators are talking about cutting 24.2 percent in the coming budget from every state agency other than the Louisiana Department of Health. That includes a $96 million cut for higher education, an $80 million cut to the TOPS college scholarship program, and cuts to law enforcement and other state services. All the while, approving new taxes is a non-starter.
I don’t gamble. I work too hard for the money I earn to see it lost in a wager with odds that are stacked against me. But that’s my choice. Unfortunately, the Louisiana Legislature is fond of gambling – with the state’s future and our livelihoods. As a state, we don’t have enough to pay our bills, but there are items the state could legalize, regulate, and tax for the benefit of us all. Before more people and companies leave for greener economic pastures, Louisiana needs to explore all options for potential capital. Sitting, waiting, wishing isn’t going to cut it. We need money to not just fund the status quo, but to improve our lot. We need to move lest we find ourselves all the way at the bottom of those 50 state rankings.
Fortune 500 Companies in south-central states
Texas 50
Florida 17
Georgia 17
Tennessee 11
Arkansas 6
Oklahoma 5
Louisiana 2
Alabama 1
Mississippi 0
