House Bill 639 is now awaiting the signature of Governor Jeff Landry after receiving approval from both the Louisiana House and Senate. If signed into law, the bill would raise the state tax rate on sports gambling in Louisiana from 15% to 21.5%. A quarter of the resulting revenue would be allocated to the newly established Supporting Programs, Opportunities, Resources, and Teams (SPORT) Fund, which is intended to benefit student-athletes at Louisiana public universities competing at the NCAA Division I level. However, these funds may be used only for new scholarships, insurance, medical coverage, facility enhancements, litigation settlement fees, and Alston awards.
Interestingly, the bill specifies that the SPORT Fund may not be used to displace, replace, or supplant any existing scholarships or awards, implying that universities may not use these funds to make direct name, image, and likeness (NIL) payments to student-athletes. While other states, such as Illinois, have increased the tax rate on in-state sports gambling, Louisiana appears to be the first state to dedicate a portion of the revenues to student-athletes.
This bill exemplifies a practical way for states to generate additional revenue to support college athletes while avoiding the complex and uncertain state and local tax implications associated with NIL payments to college athletes.
Louisiana legislators have approved a plan to give most college athletic programs in Louisiana nearly $2 million in state tax revenue annually.
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