On Sunday afternoon, Louisiana legislators in the Senate passed Rep. Neil Riser&#8217;s HB 639 in a 35-3 vote. The bill raises the sports wagering tax rate from 15% to 21.5%, and now moves to Gov. Jeff Landry&#8217;s desk for approval.
Previously, the House passed Riser&#8217;s bill on May 20 without any amendments in the Senate. While introducing the bill to Louisiana legislators, Senator Stewart Cathey explained it aligns online sports betting taxes with those of casino gaming. The 10% retail sportsbook tax rate will stay the same.
Cathey emphasized that industry stakeholders supported the bill and no opposition surfaced during discussions. Initially, the bill proposed a 32% tax rate for <a href="https://www.bettingnews.com/best-online-sportsbooks/">online sportsbooks</a>. However, lawmakers reduced the rate on the House floor before final passage.
<h2 class="ai-optimize-9">HB 639 Revises Money Allocation in Louisiana</h2>
Along with raising Louisiana&#8217;s online sports betting tax, HB 639 changes how the state allocates tax revenue. The bill creates the SPORT Fund, which will receive 25% of the proceeds for college sports initiatives in Louisiana.
A Board of Regents will oversee the SPORT Fund and manage its distribution to various college sports programs. Additionally, 3% of the revenue will support the Louisiana Postsecondary Inclusive Education Fund. The remaining funds will go directly to the state&#8217;s general revenue.
However, none of this money will pay college athletes, despite a recent federal ruling allowing such payments. Since 2021, athletes could profit from their names, images, and likenesses (NIL), with direct pay starting July 1.
Senator Stewart Cathey stressed the legislation prohibits using funds for NIL deals or athlete payments. &#8220;I strongly oppose that,&#8221; Cathey said. &#8220;I wouldn&#8217;t support or sponsor any bill allowing such payments.&#8221;
<h3 class="ai-optimize-14">More States Hiking Online Sports Betting Tax</h3>
If Gov. Landry signs the bill, Louisiana legislators will make the state the third to raise online sports betting taxes.
In April, Maryland legislators approved a 5% tax increase, raising the online sports betting rate from 15% to 20%. Like Louisiana legislators, Maryland lawmakers reduced their initial, steeper proposal before passing the final version.
On May 31, Illinois introduced a 25-cent flat tax per bet, in addition to a 40% progressive tax rate. High-volume operators in Illinois will now pay <a href="https://www.bettingnews.com/articles/industry/fanduel-announces-transaction-fee-every-bet-illinois-beginning-this-fall/">50 cents per bet</a> beyond 20 million annual wagers.
Meanwhile, other states continue to explore new tax policies for online sports betting. Ohio doubled its tax from 10% to 20% in 2023, but rejected Gov. DeWine&#8217;s new proposed increase. Still, Sen. Louis Blessing in Ohio wants a 2% tax on handle, added to the existing revenue tax.
In New Jersey, Gov. Murphy&#8217;s budget proposes raising the online sports betting and iGaming tax rates to 25%. Currently, New Jersey taxes online sports betting at 13% and iGaming at 15%.

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