Louisiana Increases Sports Betting Tax to Support College Athletics

Louisiana Increases Sports Betting Tax to Fund College Athletic Departments Following NCAA Settlement

BATON ROUGE, La. – Louisiana has officially enacted a new law increasing the tax on sports betting from 15% to 21.5%, a move intended to raise approximately $24 million for the state’s public universities with Division I football programs. This initiative comes shortly after a settlement agreement with the NCAA regarding revenue-sharing with college athletes, marking Louisiana as the first state to use a sports betting tax increase specifically to support college athletics.

The legislation will take effect on August 1, 2025 and aims to assist athletic departments that have faced significant financial challenges, especially smaller universities. The funds generated from this tax increase will be allocated for scholarships, medical coverage, and facility enhancements, among other costs associated with athletic programs, but will not go towards direct NIL (name, image, likeness) payments to athletes.

This legislation comes in response to the evolving landscape of college sports funding, particularly after the recent NCAA settlement which permits revenue-sharing with athletes. Athletic departments in Louisiana are expected to benefit, with the majority of the funding, approximately 75%, earmarked for football programs, followed by allocations for men’s and women’s basketball teams.

Enforcement of Gambling Regulations

To maintain the integrity of Louisiana’s gaming industry, the Louisiana Gaming Control Board recently issued 42 cease-and-desist notices to illegal sports betting operators. These notices target companies such as Bovada, VGW, and Fliff, which have been found to violate state gaming laws. The enforcement actions come amid a broader focus on fair gaming practices and consumer protection.

Governor Jeff Landry recently vetoed SB 181, a bill that sought to impose stricter regulations on sweepstakes gaming, arguing that existing state agencies are adequately addressing illegal gaming. The Board’s enforcement actions against illegal operators indicate a commitment to ensuring that the legal gaming market operates fairly and securely.

Context and Competitive Landscape

The financial difficulties experienced by athletic departments across Louisiana have led to increased scrutiny of funding mechanisms in college sports. By increasing the sports betting tax, state officials aim to provide essential support to universities that generate revenue through their athletic programs. Other states, such as Arkansas and North Carolina, are exploring similar funding strategies, including allocating gaming revenue to college athletics, further intensifying competition among states.

Neil Riser, a Republican state representative and co-sponsor of the bill, emphasized the importance of compensating universities for the revenue generated through their student athletes. This initiative reflects a broader trend among states as they adapt to new funding dynamics within college sports.

The allocation of the funds generated by the increased tax will be managed by the state’s Board of Regents, ensuring transparent distribution among the public universities based on their needs and revenue generation capabilities. This strategic approach aims to assist athletic programs in becoming more competitive while addressing the financial pressures they face in the current landscape of college athletics.

As Louisiana implements this new funding mechanism, it stands at the forefront of a significant shift in how college athletics are financed, prioritizing the support of educational institutions and their athletic programs in a changing regulatory environment.