A proposal that would raise the digital sports betting tax in Louisiana from 15% to 21.5% is scheduled for a third reading and final passage in the Louisiana Senate Sunday. HB 639 passed out of the House May 20, and this week began a consistent march toward the Senate floor.
The Louisiana legislature is set to adjourn June 12.
The 6.5% increase seems almost benign against the backdrop of Illinois’ latest increase. Last Saturday, lawmakers in that state added a first-of-its-kind graduated per-wager tax, which will cost the biggest operators tens of millions of dollars per year.
In Louisiana, according to the state legislative website, HB 639 was reported out of the Senate Committee on Revenue and Fiscal Affairs Monday and then appeared to be tied up in the Senate Finance Committee. But Tuesday, the bill made it out of that committee to the Legislative Bureau. From there, the bill was sent to the Senate floor, but “without Legislative Bureau amendments” — and the amendments that were proposed are not currently publicly available.
Tax increases a growing trend
The expectation is that SB 639 will pass and that Gov. Jeff Landry will sign it. If those things happen, Louisiana will join at least 12 other states that tax sports betting operators at 20% or more on digital betting revenue. Maryland joined that group last month when lawmakers there raised the online wagering tax from 15% to 20%. Lawmakers in Ohio (2023) and Illinois (2024) raised taxes in their states to at least the 20% mark since betting went live.
In addition to raising the tax, the bill would also reallocate how tax dollars are spent, sending 25% of tax revenue to the “Supporting Programs, Opportunities, and Teams Fund” (SPORT) created by the bill. The fund would distribute money to athletic departments of Louisiana state colleges and universities to be used for the “benefit” of student-athletes, defined as “scholarships, insurance, medical coverage, facility enhancements, litigation settlement fees, and Alston awards.”
In addition, 3% of tax revenue would be earmarked for the Louisiana Postsecondary Inclusive Education Fund. The balance of tax revenue would go into the state’s general fund.
