Louisiana plans sports betting tax increase to support college athletes

Louisiana is set to impose a sports betting tax hike to pull in a forecast $24 million earmarked to support college athletes across the state.

Governor Jeff Landry is about to review legislation that would generate an estimated $24 million worth of income, which would be fed back into athletic departments at some of the state’s largest universities.

This would make Louisiana the first state to raise taxes to fund college sports since the landmark settlement with the NCAA, which allowed schools to directly pay athletes for use of their names, images and likenesses (NIL) from July 1. In anticipation of this decision, Arkansas waived state income on NIL payments to college athletes.

These are two ways that states are attempting to generate income to support college athletes, at a time when the area is becoming increasingly competitive.

“These bills, and the inevitable ones that will follow, are intended to make states ‘college-athlete friendly,” said David Carter, founder of the Sports Business Group consultancy. “[However], they will no doubt continue to stoke the debate about the ‘perceived’ preferential treatment afforded athletes.”

The Louisiana legislation is the work of several months, having been drawn up by a group made up of athletic directors from many of Louisiana’s universities and state lawmakers, settling on a 21.5% tax rate, as reported by the Financial Post. The plan is that a quarter of the tax revenue from online sports betting will be split equally between 11 public Louisiana universities with Division I football programs.

There is a provision that the schools must use the money “for the benefit of student athletes,” such as for scholarships, insurance, medical coverage, facility enhancements, and litigation settlement fees. This comes as many schools are feeling financial pressures, especially for smaller institutions with less funding to support their athletes.

Featured image: Wikimedia Commons, licensed under CC BY-SA 4.0

The post Louisiana plans sports betting tax increase to support college athletes appeared first on ReadWrite.