A proposal to more than double the tax placed on sports gambling in Louisiana – and dedicate some of that revenue to Division I athletics programs – is moving forward in the state legislature.
The House Appropriations Committee voted Monday to advance House Bill 639 by Rep. Neil Riser, R-Columbia, to increase the tax on sports gambling from 15% to 32.5%. The higher rate aligns with the tax the state places on video poker.
The proposed increase in sports gambling taxes has support from conservative and progressive corners, both saying the revenue should be used to offset the “social ills” of gambling. The new rate would generate another $2 million for addiction programs.
But Riser’s bill goes further, altering the tax revenue split and putting 25% into a Supporting Programs, Opportunities, Resources and Teams (SPORT) fund that would benefit student-athletes at Louisiana’s public universities that compete at the NCAA Division I level. They include UL Lafayette, UL Monroe, Louisiana Tech, LSU, Grambling, McNeese, Nicholls, Northwestern, Southeastern, Southern and the University of New Orleans.
The committee also tied Riser’s legislation to House Bill 594 by Rep. Chance Henry, R-Crowley, which creates a flat tax on insurance premiums. Riser’s bill can only take effect if Henry’s does.
Rep. Jerome “Zee” Zeringue, R-Houma, was the only lawmaker on the committee to vote against Riser’s bill, saying he was concerned about the potential budget impact of Henry’s bill. Precise details of the bundled bills’ fiscal impact will be made clear in the next version of the fiscal note, which should be made publicly available before Riser’s bill is debated on the House floor.
Sports gambling companies opposed Riser’s bill, arguing that Louisiana’s 15% tax rate is already higher than the 14% national average. Lawmakers were skeptical of this concern, noting the companies are based out of state and have no physical infrastructure or employees in Louisiana, unlike the casinos here that pay the much higher tax rate of 32.5%.
Riser’s bill has wide support from college athletics department leaders, who packed the committee room at the State Capitol.
“The need is so high,” Riser said in an interview with the Louisiana Illuminator and Tiger Rag. “When you start talking about the SEC, talking about any level of athletics right now, it’s changed so dramatically.”
“Even like ULM … just to be competitive [in recruiting], it takes facilities, when you’re dealing with [athletes] they require you to have all those things,” Riser said.
Riser’s bill was amended to equally split revenue in the SPORT fund among eligible institutions.
The fund is expected to receive more than $31 million in dedicated funding annually, according to a fiscal note for the bill. Each school would receive approximately $2.8 million annually.
That’s a small drop in the bucket for LSU, which has an athletics budget of over $200 million. But it would be a significant lifeline for schools such as Southern, Nicholls and ULM, which each spend less than $20 million a year on their sports program.
Presently, the state’s split for sports gambling tax revenue calls for 25% to go toward early childhood education, 10% to local governments, 3% to gambling addiction programs, and the rest to other priorities and the state general fund.
Under Riser’s bill, childhood education, local governments and addiction recovery would retain their existing share of tax proceeds. In addition to the 25% that would now go to college athletics, another 3% would be dedicated to the Louisiana Postsecondary Inclusive Education Fund to finance programs for students with disabilities. The rest goes into the state general fund for a variety of government needs.