Louisiana Governor Signs Sports Betting Tax Hike

A Game-Changing Tax Boost

Governor Jeff Landry inked House Bill 639 (HB 639), hiking Louisiana’s online sports betting tax from 15% to 21.5%, effective August 1, 2025. The move, championed by co-author Neil Riser, makes Louisiana the first state to raise taxes to support college sports in response to the House v. NCAA settlement.

“Without athletes, we wouldn’t have this revenue,” Riser said, stressing fairness in giving back to universities. The tax increase aims to ease financial pressures on schools and keep Louisiana competitive.

The tax hike is expected to boost Louisiana’s sports betting revenue from $70 million to $98.5 million, adding $24 million annually. A quarter of the new revenue will flow into the Supporting Programs, Opportunities, Resources, and Teams (SPORT) Fund, split evenly among 11 NCAA Division I public universities.

These funds can cover scholarships, medical care, facility upgrades, dispute fees, and Alston awards, but not direct name, image, and likeness (NIL) payments, though it may free up other university resources for NIL.

Another 3% supports the Louisiana Post-secondary Inclusive Education Fund for students with disabilities, with most of the rest bolstering the state’s general fund.

HB 639 targets the rising costs of sharing revenue with student-athletes under the House v. NCAA deal, which allows schools to pay athletes for their NIL. Smaller universities, often dipping into general budgets to stay competitive, stand to benefit most. Riser noted the bill helps “general funds of universities,” while making Louisiana “college-athlete friendly,” as David Carter of USC put it, to attract talent and boost economic activity.

A Balanced Tax Approach

Louisiana’s 21.5% tax rate is seen as “rational,” fitting within a 15-25% range, unlike steeper hikes elsewhere. Maryland raised its rate to 20%, Colorado cut promotional deductions, and Illinois added a per-bet fee, while New York’s 51% rate dwarfs others.

Analyst James Kilsby said higher operator margins from innovations like same-game parlays justify moderate tax increases. Louisiana’s move, akin to Maryland’s, avoids rocking the betting market while addressing fiscal needs, including a projected $338.9 million budget deficit in 2026.

Louisiana joins North Carolina as one of the few states funneling betting revenue to college sports, with Arkansas exempting NIL payments from income tax. Patrick Rishe of Washington University noted that attracting top athletes boosts state visibility and economic activity, predicting more states will follow to avoid being “left exposed.”

Carter warned, however, that such bills may fuel debates over athletes’ “perceived preferential treatment.”