Louisiana Set to Raise Online Sports Betting Tax to 21.5%

Louisiana’s online sports betting market is poised for a major shake-up.

The Senate just approved House Bill 639, increasing the tax rate from 15% to 21.5% on digital wagers.

Critically, 25% of this additional revenue will flow into the new Supporting Programs, Opportunities, Resources and Teams (SPORT) Fund, supporting NCAA athletics.

Read on to see how this tax hike aligns online and retail rates, benefits college sports, and sets a regulatory benchmark.

Louisiana to Boost Online Sports Betting Tax to 21.5%, Creates NCAA SPORT Fund

3 Key Points

• Tax Alignment & Increase: Tax on online sports betting rises from 15% to match retail level at 21.5%.
• New SPORT Fund: 25% of online sports betting taxes go to the SPORT Fund, offering roughly $20 million annually to NCAA Div I schools.
• Bipartisan Support, Governor Approval Pending: The bill passed Senate 35–3 and House 74–15, now pending Governor Landry’s signature.

Market & Background

Louisiana’s gambling market is evolving. Though legalized in 2021, online sports betting faced a lower tax rate (15%) compared to brick-and-mortar operations (21.5%). House Bill 639, introduced by Rep. Neil Riser, addresses this disparity.

After swift approval in the House (74–15), the Senate passed the bill 35–3 on 8 June. Departments cited strong bipartisan unity. The measure now awaits a gubernatorial signature from Gov. Jeff Landry.

Tax Increase Explained

HB 639 raises the online sports betting tax rate to 21.5%, aligning it with the existing retail rate. This closes a policy gap lawmakers viewed as a competitive inconsistency. The initial draft proposed a steeper 31%, but the final rate reflects compromises with operators.

Strategic Revenue Allocation – SPORT Fund

A critical aspect of HB 639 is the establishment of the Supporting Programs, Opportunities, Resources and Teams (SPORT) Fund. The law earmarks 25% of online sports betting revenue to support NCAA Division I schools in Louisiana7.

Projected yields:

• Total sports betting revenue could reach $77 million annually
• SPORT Fund’s share: approximately $20 million per year
• Each Division I institution (11 schools) to receive ~$1.7 million annually

Eligible uses include scholarship funding, medical coverage, athletic facility upgrades, and Alston awards—explicitly prohibiting NIL and cash prizes to athletes.

Broader Budget and Social Impacts

The tax increase supports broader budget goals, aiming to narrow a projected $338.9 million 2026 fiscal-year deficit.

Current revenue distribution breakdown:

• 25% to early childhood education
• 10% to local governments
• 3% to gambling addiction programs
• 3% to Postsecondary Inclusive Education Fund
  With 25% now redirected to college athletics.

National Context

Louisiana follows a wave of sports betting tax hikes across the U.S.—Maryland (20%) and Illinois (tiered per-bet duty) enacted similar measures.

Some states, such as Ohio and New Jersey, debated even heavier tax burdens, but Louisiana’s approach hits a strategic middle ground.

Support & Criticism

Proponents highlight the dual benefit of fair tax parity and substantial NCAA funding. The bipartisan support underscores market maturity.

Critics, including Louisiana Progress, warn gambling revenue can worsen social issues, arguing addiction treatment should take priority.

Industry & Operator Implications

Online operators face a 6.5-point tax increase, slightly reducing net margin. However, the parity with retail minimizes competitive disadvantage .

The SPORT Fund may build goodwill with universities and public stakeholders, balancing fiscal gain with social investment.

Louisiana’s approval of HB 639 marks a pivotal moment in U.S. sports betting policy. By raising the online betting tax to 21.5% and creating the SPORT Fund, the state achieves tax parity, secures significant funding for college athletics, and addresses broader budget pressures.

As seven other states tighten regulations, Louisiana’s law offers a smart blueprint: aligning tax policy, delivering tangible public benefits, and ensuring fiscal responsibility.

Operators should prepare for compliance updates and consider strategic partnerships with universities and communities. While the bill awaits final approval, HB 639 underscores the evolving interplay between gambling regulation, taxation, and public good in modern America.