Enhanced Taxation on Sports Betting in Louisiana May Divert Funds towards College Athletics
Louisiana's HB639: A Proposed Bill Aiming to Boost Sports Betting Taxes and Athletic Funding
A new bill, HB639, has been introduced to the Louisiana State Capitol on April 16, 2025, with the aim of increasing the tax rate on online sportsbook revenue. The bill, sponsored by state Rep. Neil Riser (R-Columbia), seeks to create a new fund called the Supporting Programs, Opportunities, Resources, and Teams (SPORT).
If passed, HB639 would establish a 32.5% tax rate on online sports betting, surpassing the current national average. The bill would not impact retail sports betting and the 10% tax that oddsmakers pay from in-person wagers.
The SPORT fund, as proposed, would not provide individual funding for name, image, and likeness (NIL) programs. Instead, it would evenly distribute its annual receipts across the 11 Division 1 athletic departments in Louisiana.
The bill's sponsor, Rep. Riser, has also proposed directing 3% of the online sportsbook tax income to the Louisiana Postsecondary Inclusive Education Fund, which would help students with disabilities.
The bill has cleared the House Committee on Appropriations with a 20-1 vote on May 1, 2025, and has since moved to the full House floor for further consideration. If enacted, the estimated $2.8 million benefit from the increased tax on online sportsbook revenue would be a significant boost to athletic funding at many Louisiana schools, other than LSU.
Financial forecasts project that the schools would receive almost $3 million annually from SPORT. A portion of the added funds would be directed to public universities that compete at the NCAA Division 1 level in Louisiana.
However, the Louisiana Casino Association and several online sports betting operators, including FanDuel, DraftKings, and BetMGM, have opposed House Bill 639 due to the proposed 32.5% online tax rate. They argue that by more than doubling their online tax, they will need to tighten odds, offer fewer promotions, and pull back new account signup incentives to remain competitive.
Rep. Jerome Zeringue (R-Houma) was the lone dissenter, expressing concerns about potential future budget problems. If HB639 becomes law, the bill would continue to support the three defined sports betting beneficiaries at their current levels.
Louisiana's online sports betting tax revenue currently supports early childhood education (25%), local governments (10%), gambling addiction programs (3%), and the state's General Fund (62%). If HB639 is passed, the bill would direct 3% of the online sportsbook tax income to the Louisiana Postsecondary Inclusive Education Fund.
In conclusion, HB639, if passed, would significantly increase the tax rate on online sports betting in Louisiana, create a new fund for athletic departments and students with disabilities, and potentially impact the competitiveness of online sports betting operators. The bill is currently under consideration in the Louisiana House of Representatives.
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