Louisiana lawmakers have taken a significant step toward restructuring the state’s online sports betting tax framework with the House’s passage of an amended version of House Bill 639. The legislation, introduced by Rep. Neil Riser (R-Columbia), proposes raising the tax on mobile sports wagering from the current 15% to 21.5%, a substantial revision from the original 32.5% increase suggested in earlier drafts.

New tax revenue targets college athletics, disability support:

The updated proposal passed with strong support in a 74-15 House vote and now moves to the Senate for further deliberation. The tax increase is part of broader legislative efforts to address Louisiana’s projected $338.9 million budget deficit in fiscal year 2026 without increasing income or sales taxes.

A central feature of the revised bill is the planned reallocation of online wagering tax revenue. Under HB 639, 25% of all revenue generated from mobile sports betting will be directed to a newly formed Supporting Programs, Opportunities, Resources, and Teams (SPORT) Fund. The fund will support NCAA Division I athletic departments at Louisiana public universities, including LSU, UL Lafayette, Southern, and others.

Each qualifying school is expected to receive approximately $1.7 million annually. While this amount may represent a modest contribution for larger programs like LSU, which operates with a sports budget exceeding $200 million, it would significantly bolster funding for smaller schools with more limited athletic budgets.

In addition to the SPORT Fund, 3% of the new tax revenue will go toward the Louisiana Postsecondary Inclusive Education Fund, which supports students with disabilities in higher education. Other allocations—such as the 25% for early childhood education, 10% to local governments, and 3% to addiction recovery programs—will remain unchanged from current law. The remaining revenue will be directed to the state’s general fund.

The original version of the bill called for a 32.5% tax rate, aligning online sports betting with the rate already applied to video poker terminals at truck stops. However, industry concerns about market sustainability prompted lawmakers to reduce the proposed rate. The revised 21.5% tax applies solely to net proceeds from digital sports betting platforms and excludes in-person retail betting, which remains taxed at 10%.

According to Bossier Press-Tribune, fiscal projections based on the initial 32.5% rate anticipated annual tax revenue from sports wagering to grow from $59 million to as much as $190 million by 2030. However, with the lower rate now proposed, updated estimates are still pending. State analysts and the Senate are expected to review these figures before finalizing the bill.

Broader budget strategy and political dynamics:

Support for HB 639 has come from both sides of the aisle, with lawmakers emphasizing the importance of recurring revenue sources that avoid politically sensitive income or sales tax increases. While supporters have highlighted the bill’s benefit to education and student support, not all reactions have been positive.

Peter Robins-Brown, executive director of advocacy group Louisiana Progress, expressed concern about dedicating new gambling revenues to athletics, arguing the funds should prioritize addressing gambling-related harm. “Legalized mobile gambling has created or exacerbated many social and cultural problems, including addiction, bankruptcies and even increases in domestic violence,” he said. “New tax revenue should be used first and foremost to address some of those problems before we talk about spending more money on college sports.”

The bill’s proposed allocation to athletic programs includes stipulations to ensure funds do not replace existing scholarships or awards. Instead, the funds must supplement financial support, covering costs like scholarships, medical expenses, facilities upgrades, Alston awards, and litigation settlements. Distribution will be handled by the Louisiana Board of Regents.

Although HB 639 has cleared the House, it must still pass through Senate committees and the full Senate chamber before becoming law. Senate lawmakers will also weigh revised fiscal projections to assess how the new tax rate affects both state revenue targets and the competitiveness of Louisiana’s sports betting market.

The bill’s progress in Louisiana mirrors similar developments in other states. In Maryland, a recent law increased the online sports betting tax rate from 15% to 20%, following a compromise between budget needs and industry concerns. Other states, including Ohio, New Jersey, and North Carolina, are also exploring new tax frameworks for gambling operators in 2025.