Louisiana Approves Online Sports Betting Tax Increase to Fund College Athletics

Louisiana lawmakers have approved a bill increasing the state's tax on the best sports betting sites from 15% to 21.5%, aligning it with the existing retail sportsbook rate. The measure, House Bill 639, passed the Senate by a 35–3 majority in a weekend vote on June 8, following earlier approval in the House by a 73–15 margin.

The bill, introduced by Rep. Neil Riser, initially proposed a significantly higher tax of up to 32.5%. Following negotiations with industry stakeholders, legislators settled on a more moderate rate. The new tax structure brings parity between online and in-person Louisiana sports betting across the state, closing a competitive gap that had favored digital operators. Lawmakers say the alignment streamlines the regulatory environment and ensures a level playing field across platforms.

SPORT Fund

House Bill 639 also establishes the Supporting Programs, Opportunities, Resources, and Teams (SPORT) Fund. This initiative will allocate 25% of the additional revenue from the higher online tax rate to NCAA Division I athletic programs across Louisiana. 

Universities eligible for SPORT Fund support include LSU, Louisiana Tech, Southern, Grambling, UL Lafayette, UL Monroe, McNeese State, Nicholls State, Northwestern State, Southeastern Louisiana, and the University of New Orleans. With the new tax rate expected to raise around $77 million annually, approximately $20 million would be allocated to the fund, resulting in each school receiving around $1.7 million.

The remaining revenue allocation is in line with previous guidance. 25% will go to early childhood education programs, 10% to local governments, and 3% to gambling addiction treatment. Additionally, 3% will be allocated for inclusive postsecondary education, with the remaining funds earmarked for the state's general budget.

Mixed reactions

Supporters of the tax increase highlight its dual benefits of enhancing college sports funding while maintaining significant investments in education and addiction support services. Some Legislators argue that bringing uniformity to tax rates creates a more balanced and equitable sports betting market.

The bill has also been subject to criticism. Peter Robins-Brown of Louisiana Progress voiced concerns that increased reliance on gambling revenue may worsen social problems, including addiction and domestic violence. He called for a greater share of the revenue to be invested in comprehensive addiction prevention and treatment programs, rather than college athletics.

With both legislative chambers giving strong approval, the bill now moves to Governor Jeff Landry, who is expected to sign it into law. Louisiana would then join a growing number of states, such as Illinois and Maryland, which have recently eyed their sports betting industries as a source of funding for public programs through higher taxes.