The state's House of Representatives approved a revised bill to raise taxes on Louisiana online sports betting, choosing a more moderate increase than initially proposed.
House Bill 639, sponsored by Republican Rep. Neil Riser of Columbia, was amended before passage Tuesday to raise the mobile sports betting tax rate from 15% to 21.5%, significantly lower than the 32.5% included in the bill's initial draft.
Key takeaways
- The Louisiana House passed a bill raising the mobile sports betting tax rate from 15% to 21.5%.
- The original 32.5% proposal was reduced, and updated fiscal projections are pending Senate consideration.
- The revised tax revenue will partially fund public college athletics and support students with disabilities.
The amended bill forms part of a broader legislative strategy to address the state's budget deficit in fiscal year 2026, currently estimated to reach as much as $338.9 million. However, in contrast, the tax on in-person retail sports betting remains fixed at 10%.
Before the amendment, state fiscal analysts projected the higher tax rate could raise annual sports betting tax revenue from around $59 million to approximately $190 million by 2030. However, those projections were based on the 32.5% rate, and with the revised 21.5% rate, updated revenue estimates haven't yet been released.
New allocations in Louisiana sports betting tax bill
In addition to the revised tax hike, House Bill 639 includes provisions for allocating new tax revenues to specific state programs. Under the proposed framework, 25% of the money from online sports betting taxes would go to a newly established college sports fund. This fund would directly support athletic departments at Louisiana's public colleges and universities.
Another 3% of online betting tax income would be earmarked for programs supporting higher education students with disabilities. These allocations reflect a shift toward using gambling-derived revenue for education and student services, a strategy some lawmakers argue could help shield essential programs from cuts during future fiscal shortfalls.
The bill also includes broader funding goals, including increased money to education, local governments, and Louisiana's general fund. However, with the tax rate scaled back from the initial proposal, the exact figures for these allocations may be revised downward during Senate deliberations or subsequent fiscal analyses.
Supporters emphasized its focus on generating recurring revenue without raising income or sales taxes, which are politically more sensitive. Online sports betting has become a high-growth area for the state, making it an attractive target for increased taxes compared to other funding sources.
What happens to House Bill 639 now?
House Bill 639 is part of a suite of financial measures under consideration during the current legislative session to balance Louisiana's budget. With pressure mounting to resolve the impending fiscal shortfall, lawmakers are trying to prioritize funding for critical sectors such as education while avoiding broader tax hikes that could face strong opposition.
The legislation's final version, including revised revenue forecasts and allocation details, depends on forthcoming Senate discussions and any additional amendments lawmakers may introduce during that process.
Higher taxes could put an even tighter squeeze on Louisiana sportsbooks, which saw a 15-month low hold percentage and profit drop in March.
