Louisiana Sports Betting Tax Increase Could Help Fund College Athletic Departments

Posted on: May 1, 2025, 12:22h. 

Last updated on: May 1, 2025, 09:42h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Legislation in Louisiana seeks to more than double the state’s online sports betting tax
  • The added tax funds, if the bill becomes law, would help support NCAA D1 sports
  • Louisiana is home to 11 colleges and universities that compete at the D1 level

A bill to drastically increase Louisiana’s sports betting tax imposed on online sportsbooks could help fund college athletics, the legislation’s sponsor says.

Louisiana sports betting tax rate
The McNeese State University Cowboys play a home football game in Lake Charles, La., on Aug. 31, 2019, before Hurricane Laura damaged the facility a year later. McNeese could benefit from a legislative proposal to increase Louisiana’s tax on online sportsbooks from 15% to 32.5%. (Image: McNeese State University)

House Bill 639 was introduced to the Louisiana State Capitol in Baton Rouge on April 16. The measure comes from state Rep. Neil Riser (R-Columbia).

HB639 would jack up the tax rate on online sportsbook revenue and direct a considerable portion of the added funds to public universities that compete at the NCAA Division 1 level, namely LSU, Louisiana Tech, Grambling, McNeese, Nicholls, Northwestern, Southeastern, Southern, the University of New Orleans, UL Lafayette, and UL Monroe.

On Monday, Riser’s HB639 cleared the House Committee on Appropriations with a 20-1 vote. Rep. Jerome Zeringue (R-Houma) was the lone dissenter on his belief that directing such money from sports betting to state schools could create budget problems in the future.

Support and Opposition

Riser’s bill suggests raising the online sports betting tax to 32.5%. If enacted, HB639 would require that 25% of the online sportsbook benefit the state receives go to a new fund called the Supporting Programs, Opportunities, Resources, and Teams, or SPORT.

SPORT would split its annual receipts evenly across the 11 D1 athletic departments. State financial forecasts project that the schools would receive almost $3 million annually.

While that’s just a small percentage of the more than $200 million that LSU will spend this year on its sports programs, the estimated $2.8 million benefit would be a noticeable increase to athletic funding at many of the other schools.

The need is high,” Riser said of the importance of college sports funding in an interview with the Louisiana Illuminator. “Even at like the University of Louisiana at Monroe, just to be competitive in recruiting, it takes facilities.”

The SPORT fund would not provide individual funding for name, image, and likeness (NIL) programs, which allow student-athletes to make money while still amateurs enrolled in school.

Louisiana’s many licensed online sportsbook operators naturally opposed HB639. Officials with firms like FanDuel, DraftKings, and BetMGM testified before the committee that the state’s current 15% online sports betting tax they pay is already 1% higher than the national average among states where internet sports betting is regulated.

The sportsbooks argued that by more than doubling their online tax, books will become less competitive against illegal, offshore sports betting websites that pay no tax. They’ll need to tighten odds, offer fewer promotions, and pull back new account signup incentives, they said.

Other Sports Betting Benefits

Louisiana’s online sports betting tax revenue is currently used to support early childhood education (25%), local governments (10%), and gambling addiction programs (3%). The remaining 62% is directed to the state’s General Fund.

Riser’s bill would continue to support the three defined sports betting beneficiaries at their current levels. In addition to the college athletics benefit, Riser proposes directing 3% of the online sportsbook tax income to the Louisiana Postsecondary Inclusive Education Fund to help students with disabilities. The leftover 34% would go to the General Fund.  

HB639 wouldn’t impact retail sports betting and the 10% tax that oddsmakers pay from in-person wagers. The bill has since moved to the full House floor for further consideration.