Louisiana Lawmakers Approve Online Sports Betting Tax Hike to Support Student-Athletes
Louisiana Lawmakers Approve Online Sports Betting Tax Hike to Support Student-Athletes
- Louisiana’s online sportsbooks could see their tax rates increase
- Louisiana lawmakers have passed legislation increasing the online sportsbook tax rate to 21.5%
- The legislation awaits Gov. Landry’s signature
In a significant move affecting the industry, Louisiana lawmakers aim to increase the tax rate that online sports betting operators must pay to operate within the state. Currently, these operators enjoy a tax rate of 15%, which is set to rise to 21.5% if House Bill 639 receives the signature of Governor Jeff Landry.
Filed by Representative Neil Riser (R-Columbia), HB639 saw overwhelming support in the House, passing with a vote of 73-15. The Senate followed suit, approving the measure with a vote of 35-3. Originally proposed at a 32.5% tax hike, the final figure represents a compromise aimed at minimizing opposition from sportsbooks.
Despite concerns raised by sportsbook operators about the potential impact of increased taxes on their competitiveness against illegal offshore sportsbooks, lawmakers largely backed the bill. The intent is to channel tax revenues toward funding student-athletes and their respective programs within the state.
The SPORT Fund
If signed into law, the bill would allocate 25% of the new tax revenue to the Supporting Programs, Opportunities, Resources, and Teams Fund (SPORT Fund). This fund aims to benefit athletic departments at public universities participating in NCAA Division I athletics.
- Eligible larger schools like Louisiana State University (LSU) alongside smaller institutions such as McNeese State University, Grambling State University, and Southern University.
- The fund is estimated to generate approximately $2 million annually for qualifying institutions.
The revenues generated will assist in funding scholarships, medical coverage, facility improvements, and the provision of Alston Awards—educational funds specifically for student-athletes. Importantly, these funds will not replace existing scholarships or awards.
Commitment to Inclusion
Additionally, the proposed legislation would require that 3% of online sports betting tax receipts be directed toward the Louisiana Postsecondary Inclusive Education Fund. This fund supports establishing and enhancing inclusive programs for students with intellectual or developmental disabilities across colleges and universities.
Concerns Over Market Competition
During deliberations, leading online sportsbooks expressed concerns that the increased tax obligations would necessitate reducing promotions and tightening odds, thereby compelling some players to seek alternatives with offshore sportsbooks offering better odds.
“A massive tax hike … means fewer promos, smaller bonuses, and worse odds for Louisiana sports fans,” stated the Sports Betting Alliance, representing major sportsbooks.
As the proposed legislation awaits the governor’s endorsement, all eyes are on how this will shape the landscape of online sports betting and collegiate athletics funding in Louisiana.
Summary
The legislative approval for increasing the online sports betting tax rate to 21.5% in Louisiana marks a pivotal shift in how the state manages its gaming revenues. With significant portions of the newly generated tax directed towards funding student-athletes and their programs, this move reflects a commitment to supporting educational opportunities while navigating the competitive realm of online sports wagering. Stakeholders await the governor’s signature on this transformative bill, which promises to reform funding for collegiate athletics across the state.
