Senate Approves Sports Betting Tax Increase, Awaits Governor’s Signature

Online sportsbooks operating in Louisiana are likely to see a significant uptick in their tax obligations following a decisive Senate vote on Sunday. By a margin of 35-3, the Senate ed House Bill 639, introduced by Rep. Neil Riser, to increase the tax rate on online sports betting revenue from 15% to 21.5%. The proposal now advances to Gov. Jeff Landry, whose signature would finalize the bill into law.

This legislation aligns online sportsbook taxation with what brick-and-mortar casinos pay for other forms of casino gaming, as noted by Sen. Stewart Cathey, who presented the bill on the Senate floor. Retail sportsbooks, however, will continue to be taxed at their existing rate of 10%.

Cathey emphasized the cooperative nature of the negotiations, stating, “It was worked out with the industry in agreement. There is no opposition.” Originally, the bill suggested a steeper 32% rate before lawmakers revised it during House discussions. It was ed by the House on May 20 without further amendments before clearing the Senate.

SPORT Fund to College Athletics, Not Pay Athletes

A major component of the new bill is the creation of the SPORT Fund—short for ing Programs, Opportunities, Resources, and Teams—which will receive 25% of the new tax revenue. The fund is designated for Louisiana’s Division I universities and will be directed toward facility improvements, scholarships, insurance, and healthcare services for student-athletes.

However, lawmakers were quick to draw a clear boundary on how these funds can be utilized. “It is specifically in the legislation that it cannot be used to fund NIL or to make direct payments to athletes,” Cathey explained. “Absolutely not, I’m fundamentally opposed to that and would not have put my name on anything that allowed that.”

Filling Budget Gaps with Betting Revenue

The increased tax revenue is seen as a key strategy to address Louisiana’s projected $338.9 million deficit for the 2026 fiscal year. In 2025, online sports wagering generated $180 million in revenue, contributing $22.6 million to the state under the 15% tax rate. Had the 21.5% rate been in place, that figure would have reached $38.7 million.

Originally filed in April, Riser’s bill received significant in the House, ing with a 74-16 vote. While initially proposing a rate more than double the current level, lawmakers settled on a more moderate increase during legislative debate.

Part of a Growing National Trend

Louisiana is the third U.S. state this year to greenlight a tax hike on online sports betting operators. Maryland recently raised its rate from 15% to 20%, while Illinois implemented a new flat tax—charging operators 25 cents per wager on the first 20 million bets, with the rate increasing to 50 cents for any bets beyond that.

Elsewhere, states like New Jersey and Ohio are also eyeing additional tax measures. New Jersey Gov. Phil Murphy has proposed raising the sports betting tax to 25%, while in Ohio, lawmakers debated but ultimately shelved another tax increase, after having already doubled the rate to 20% in 2023.

Additionally, Louisiana’s legislative session also saw the advancement of SB 181, which seeks to ban online sweepstakes gaming operators in the state. That bill has also reached the governor’s desk for final approval.

Source:“Louisiana lawmakers approve online sports betting tax raise”, sbcamericas.com, Jun 9, 2025