The Louisiana Senate Sunday afternoon approved a 6.5% tax increase on digital sports betting revenue by a vote of 35-3. The bill, HB 639, which passed the House May 20, will now be sent to Gov. Jeff Landry for signature. Should he sign it, the increase will be the third across the U.S. this year.
Maryland Gov. Wes Moore last month signed his state’s budget bill, which included a 5% increase in the sports betting tax, from 15% to 20%. And May 31, the Illinois legislature created a new tax on wagers, added it to the budget bill, and passed it. Gov. JB Pritzker has not signed that bill, which will tax operators 25 cents per wager for the first 20 million wagers they take and 50 cents for any wagers above 20 million.
In Louisiana, the Senate passed the bill with no new amendments, and little discussion. Bill sponsor Neil Riser said the bill was crafted “in conjunction with the industry and there is no opposition.” He also assured fellow lawmakers that none of the new funds would fund NIL situations or “directly pay athletes.” He did say that the increase would be used to “offset new costs” after a federal judge on June 6 signed off on a settlement that allows U.S. colleges and universities to pay athletes.
Pay to play coming July 1
NCAA athletes can begin being paid July 1, and per the settlement the NCAA will retroactively pay $2.8 billion over the next 10 years to any student-athlete who played between 2016 and now. There will be a cap on the payments going forward, which will be in addition to scholarships.
College athletes have been able to benefit from the use of the “name, image, and likeness” (NIL) since 2021. Coupled with the latest settlement, the college athletic landscape has shifted significantly in the last five years.
On Friday, NCAA President Charlie Baker called the settlement the start of an “exciting moment” that “opens a pathway to begin stabilizing college sports.”
The increase in Louisiana could have been higher — HB 639 was introduced with a 32.5% tax rate, but that was changed on the House floor. And a second bill, HB 587, filed by Rep. Shaun Mena, had a progressive tax rate similar to the one approved in Illinois last year, but it did not gain traction. Under that proposal, the most prolific sportsbooks would have paid a 40% tax.
Louisiana retail sportsbooks will continue to pay a 10% tax on revenue. The text of HB 639 does not indicate when the tax rate will go into effect.
