Provides for the allowable amount of promotional play offered by certain gaming operators and for deductions regarding promotional play (EG1 -$974,000 GF RV See Note)
Summary
HB 542 revises Louisiana law governing how certain gaming operators calculate taxable gaming revenue when they offer promotional play. The bill amends definitions in three parts of the gaming code—covering riverboat/other gaming licensees, casino gaming operators, and slot machine facilities—to allow a larger deduction for promotional play wagers than current law permits. Under the bill, the deduction remains capped at $5 million annually directly attributable to promotional play wagers, but operators may instead use a higher percentage-based cap if it is greater.
The percentage cap increases over time: 4% of taxable revenue beginning in tax year 2026, 7% beginning in tax year 2027, and 10% beginning in tax year 2028 and thereafter. In practical terms, the bill is designed to let gaming operators deduct more promotional credits or free-play wagers from net gaming proceeds, gross revenue, and net slot machine proceeds, which lowers the amount of revenue subject to state gaming taxes and related calculations. The bill also makes technical conforming changes to ensure the same promotional-play rules apply across the affected gaming categories.
Impact
HB 542 amends R.S. 27:44, 27:205, and 27:353, changing the statutory definitions of net gaming proceeds, gross revenue, and net slot machine proceeds for certain Louisiana gaming operators. The main legal effect is to expand the allowable deduction for promotional play wagers, which reduces taxable gaming revenue and is estimated in the bill caption to decrease general fund revenue by about $974,000. The bill affects licensed gaming operators, casino gaming operators, and eligible slot machine facilities by changing how promotional credits are treated for tax and reporting purposes.
Sentiment
The bill appears to have received mixed but ultimately favorable support in the House, passing final passage with 64 yeas and 31 nays on one recorded vote and 61 yeas and 36 nays on another recorded vote. The absence of committee transcript material limits insight into detailed debate, but the vote totals suggest a meaningful level of opposition alongside majority support. Overall, the sentiment seems to have been that the measure was acceptable to a majority of members, though not without concern about its fiscal effect and policy implications for gaming taxation.
Contention
The main point of contention is fiscal: opponents are likely concerned that increasing the promotional-play deduction reduces state gaming revenue and creates a tax preference for gaming operators, while supporters likely view the change as a way to align Louisiana with industry practices and give operators more flexibility in marketing and customer incentives. Another possible point of debate is the phased-in percentage cap, which gradually rises from 4% to 10% over three years; this structure suggests an attempt to balance industry relief with a slower revenue impact, but it still shifts more revenue out of the taxable base. The bill’s application across multiple gaming definitions also means the change affects several segments of the gaming industry, not just one operator type.