Louisiana’s plan to pay more to college athletes? Taxing sports betting apps

Disputed law before Gov. Jeff Landry lifts Louisiana first to become the first state to fund university sports The judge approved a landmark settlement The NCAA allows schools to pay athletes directly to use their name, image, and portrait (nil). Arkansas was the first of this year, anticipating court approval Waives state income tax About zero payments made to athletes by institutions of higher education.

It seems almost certain that more states will adopt their own creative methods or at least maintain their pace in a rapidly evolving and highly competitive sector of university sports.

“These bills, and the inevitable, are aimed at making them athlete-friendly at state colleges,” said David Carter, founder of the Sports Business Group Consultant and adjunct professor at the University of Southern California. But “they will undoubtedly continue to surprise the debate about the ‘recognized’ priority treatment given to athletes. ”

The new NCCA rules that allow direct payments to college athletes kick on July 1st. In the first year, each Division I school can share up to $20 million with athletes. The settlement also continues to allow university athletes nil I’ll receive money From third parties, such as groups supported by donors who support specific schools.

Louisianaville Sponsor: “We love soccer.”

Louisiana law won final approval just two days after a judge approved an antitrust settlement between the NCAA and the athlete, but it was in work for several months. Many athletic directors from Louisiana universities met earlier this year to plan with lawmakers to ease some of their financial pressures by splitting the state’s share Sports bet tax revenue.

The biggest question for lawmakers was how much the tax hike would support. The first proposal attempted to double the state’s 15% tax on net income from online sports betting. However, lawmakers ultimately agreed to a 21.5% tax rate in a compromise with the industry.

A quarter of the tax revenue from online sports betting (estimated $24.3 million) will be split equally into 11 public universities in a meeting with the Division I Football Program. This money should be used “in the interest of student-athletes” such as scholarships, insurance, health insurance, facilities strengthening, and litigation settlement costs.

State taxes do not provide athletes with direct payments. However, by releasing resources from other universities, it can indirectly promote it.

The law was overwhelmingly passed on the last day of Louisiana’s annual session.

“We love Louisiana football, and that’s the easiest way to say it,” said Neil Riser, a Republican lawmaker who sponsored the bill.

Small universities feel a slant

Many colleges and universities across the country feel a narrower look to finance, but it has particularly impacted the athletic sectors of small schools.

The athletic division of Top Division I Football Conference has won millions of dollars from media rights, donors, corporate sponsors and ticket sales, with a median of just 7% from student fees and institutional and government support. Knight-Newhouse College Athletics Database.

However, the remaining schools at the Division I Football Bowl Conference achieved a median of 63% of revenue from such sources last year. Schools without soccer teams also obtained a median 81% of the revenues in the athletic sector from institutional and government support or student fees.

Riser said small universities, particularly in Louisiana, are struggling financially, and have moved money from general funds to sports programs to try to stay competitive. At the same time, the state is receiving millions of dollars in tax revenue from sports bets held at least in part in college athletics.

“Without athletes, we don’t have any income. I felt it was fair to give something back and at the same time help the general funding of the university,” Riser said.

Other states invest in university sports

Louisiana will be the second state after North Carolina to dedicate a portion of its sports betting proceeds to college athletics. North Carolina We launched an online sports betting Last year, under state law, it designated a portion of an 18% tax on total game revenue to the athletic divisions of 13 public universities. The two largest agencies in the state were excluded. But it may be about to change.

Different budget plans passed by the Capitol and the Senate this year, both begin to allocate sports betting tax revenue to the University of North Carolina Chapel Hill and North Carolina State University athletic programs. The Senate version also doubles the tax rate. The proposal comes one year after the University of North Carolina’s fiduciary is approved Athletics Club Audit After the reserve budget forecasts hundreds of millions of dollars of debt in the coming years.

Other schools are taking action due to the deficit in the athletic sector. Last week, the University of Kentucky trustee approved a $31 million operating loan from the Athletics Department to begin direct payments to athletes. That came after the trustees voted to convert the Kentucky Athletics Club into a limited holding company in April – Champions Blue LLC – Navigate more subtlely new financial pressures.

Given the money involved in college athletics, it’s no surprise that the state is beginning to provide taxes to the athletics department, or that it’s starting tax credits for college athletes, as in Arkansas, said Patrick Lish, executive director of the sports business program at Washington University in St. Louis.

“If you can attract great athletes to your school or state, this is your visibility into your state. This is more potential out-of-town economic activity for your state,” says Rishe. “I think you’ll see a lot of states pursuing this because you don’t want to be exposed or at a disadvantage.”