Louisiana Increases Sports Gambling Tax to Fund College Athletics

Categories: Louisiana Business NewsLouisiana EducationLouisiana News

Athletes from Louisiana universities in action during a college sports event.

News Summary

Louisiana legislators have passed House Bill 639, allocating nearly $2 million annually from increased sports gambling tax revenues to college athletic programs statewide. The tax rate on sports betting will rise from 15% to 21.5%, generating an estimated $77 million each year, with about $20 million designated for the SPORT Fund. This funding aims to support student-athletes at public universities, benefiting institutions that compete at the NCAA Division I level. Although there are concerns about prioritizing athletics funding amidst budget constraints, this strategic move enhances the collegiate sports experience.

BATON ROUGE – Louisiana legislators have approved a significant plan to channel nearly $2 million annually from state tax revenue into college athletic programs across the state. This initiative comes as part of House Bill 639, which was sponsored by Rep. Neil Riser. The bill passed the Senate with a decisive vote of 35-3 after earlier securing a 74-15 approval in the House. It is anticipated that the measure will soon be signed into law by Governor Jeff Landry.

The state plans to increase the tax rate on sports gambling from the current 15% to 21.5%. This increased tax rate is projected to generate approximately $77 million each year from sports betting activities in Louisiana, with around $20 million specifically earmarked for the SUPPORT Programs, Opportunities, Resources, and Teams (SPORT) Fund. This fund is particularly focused on benefiting student-athletes at public universities in Louisiana that compete at the NCAA Division I level.

The institutions that will benefit from the SPORT Fund include well-known universities such as UL Lafayette, UL Monroe, Louisiana Tech, LSU, Grambling, McNeese, Nicholls, Northwestern State, Southeastern, Southern, and the University of New Orleans. Each of these schools is expected to receive about $1.7 million annually from the fund.

These funds can be utilized for a variety of essential purposes including scholarships, insurance, medical coverage, facility improvements, litigation settlements, and various education-related awards for student-athletes. While this additional funding may appear trivial to major programs like LSU, which boasts an athletics budget exceeding $200 million, it represents a vital boost for smaller institutions that operate with budgets under $20 million.

The bipartisan support for this tax increase highlights a broader commitment to utilizing the revenue derived from sports gambling to tackle the “social ills” often associated with gambling activities. The tax revenue distribution prior to this bill allocated 25% for early childhood education, 10% for local governments, and 3% for gambling addiction programs. Under the new policy, these allocations will not be diminished, and an additional 3% will be directed towards the Louisiana Postsecondary Inclusive Education Fund.

The implementation of House Bill 639 reflects Louisiana’s ongoing efforts to remain competitive in the college sports landscape, especially in light of pressing budgetary challenges. This legislation positions Louisiana as only the second state, following North Carolina, to designate a portion of sports betting revenue specifically for college athletics.

The decision to allocate funding for college athletic programs has not been without controversy, as some progressive critics have expressed concerns regarding prioritizing athletic funding amidst broader budget constraints and the social issues tied to gambling. Nonetheless, the strategic move aims to harness potential revenue from a popular entertainment sector—sports betting—to enhance the collegiate sports experience for student-athletes and strengthen athletic programs statewide.

In summary, with the approval of this bill to increase the tax on sports gambling, Louisiana is taking notable steps to bolster its college athletics programs while emphasizing responsible gambling and education funding initiatives. The new budget, which will provide crucial financial resources to a wide range of universities, promises to significantly impact the landscape of college sports in the state.