In theory, a low tax rate would encourage smaller operators to come to a state because they would earn more revenue by paying a lower amount of their handle in tax. A state with a high tax rate might see sportsbooks offer larger spreads (-120 vs. -110), fewer discounts, and have fewer operators because it would be harder to make enough money to remain profitable if 36% of your revenue goes to the state, as is the case in Pennsylvania. But Pennsylvania had enough of a population base to make it worthwhile for the sportsbooks to come to the state and pay the high tax rate, proving the naysayers somewhat wrong. State leaders in Louisiana decided that a low tax rate would be more beneficial for the industry and eventually lead to increased competition. They settled on a low tax rate of 10% for retail betting and 15% for mobile betting. This should hit the sweet spot of maximizing revenue generated for the state while not discouraging operators from potentially opening up shop in Louisiana.