Louisiana is about to increase taxes on sports betting to inject more than $ 24 million into sports services into the most eminent public universities in the state.
The legislation pending before Governor Jeff Landry would make Louisiana the first state to increase taxes to finance university sports since A judge approved a historic regulation With the NCAA allowing schools to pay the athletes directly for the use of their name, their image and their resemblance (Nile). Anticipating the approval of the court, the Arkansas has become the first renounce state income taxes On the zero payments made to athletes by higher education establishments.
More and more states almost seem to adopt their own creative ways to gain an advantage – or at least to keep pace – in the rapid and very competitive field of university sports.
“These bills, and the inevitable that will follow, are intended to make the United States friendly,” said David Carter, founder of the Sports Group Council and Auxiliary Professor at the University of South California. But “they will undoubtedly continue to stir up the debate on the” perceived “preferential treatment offered to athletes.”
The new NCAA rules authorizing direct payments to university athletes who kicks in July 1. During the first year, each division I school can share up to $ 20.5 million with its athletes – a figure that can be easier to meet for large -scale programs than for small weighing schools if it is necessary to divert money for other purposes. The regulations also continue to allow university athletes to Receive money Third parties, such as collectives supported by donors who support specific schools.
Louisiana Bill Sponsor: “We love football”
Louisiana’s legislation won the final approval just two days after a judge approved the antitrust regulations between the NCAA and the athletes, but it has been underway for months. The sports directors of many universities of Louisiana gathered earlier this year and developed a plan with the legislators to relieve some of their financial pressures by dividing a share of the state Sports betting tax income.
The biggest question for legislators was the size of a tax increase to be supported. The initial proposal sought to double the tax of 15% of the State on the net product of online sports betting. But legislators finally agreed with a tax rate of 21.5% in a compromise with industry.
A quarter of online sports betting tax revenue – about $ 24.3 million – is also said to be divided between 11 public universities during conferences with Division I football programs. Money must be used “for the benefit of athlete students”, including scholarships, insurance, medical coverage, improvements in establishments and dispute settlement costs.
State money money will not provide direct payments to athletes. But that could facilitate this indirectly by releasing other university resources.
The legislation was adopted massively in the last days of the annual session of Louisiana.
“We love football in Louisiana – this is the simplest way to say,” said the Republican State representative Neil Rrisse, who sponsored the bill.
Small universities feel pressure
Many colleges and universities across the country have felt financial pressure, but this has particularly affected the sports departments of small schools.
Sports departments in the best Division I football conferences take millions of dollars in media rights, donors, business sponsors and ticket sales, with a median of only 7% from study costs and institutional and government support, according to the Knight-Newhouse College Athletics database.
But the remaining schools of the football bowl conferences in division I obtained a median of 63% of the income from these sources last year. And schools without football teams obtained a median of 81% of their income from the sports department for institutional and government or students’ support costs.
Risse said that the small universities of Louisiana, in particular, had financial difficulties and changed money from their general funds to their sports programs to try to remain competitive. At the same time, the state has taken millions of dollars in tax revenue from sports betting made at least in part on university athletics.
“Without the athletes, we would not have income. I just had the impression that it is the equity that we gave something and, at the same time, help the general funds of the universities,” said Rister.
Other states invest in university sports
Louisiana would become the second state behind the North Carolina to devote part of its sports betting income to university athletics. North Carolina launched online sports betting Last year, within the framework of a law of the law of the State, part of a tax of 18% on the gross income of games to sports services in 13 public universities. The two largest state institutions have been excluded. But it could be about to change.
Different budgetary plans adopted by the State House and the Senate this year would both begin to allocate the tax revenues of sports betting to sports programs from the University of Caroline du Nord in Chapel Hill and at the State University of North. The Senate version would also double the tax rate. The proposals come a year after the administrators of the University of North Carolina approved An audit of the athletics department After a preliminary budget has planned about $ 100 million in debt in the coming years.
Other schools also take measures due to deficits in their sports services. Last week, the trustee of the University of Kentucky approved an operating loan of $ 31 million for the athletics department when it begins to make direct payments to athletes. This came after the administrators in April voted to convert the Kentucky athletics department to a limited liability portfolio company – Blue LLC champions – to navigate more agile in emerging financial pressures.
Given the money involved in college athletics, it is not surprising that states are starting to provide tax funds to sports services or – as in the case of Arkansas – tax alternatives to university athletes, said Patrick Rishe, Executive Director of the Sports Trade Program at Washington University in St. Louis.
“If you can attract better athletes to your schools and states, then it is more visibility for your states, it is a more potential economic activity in the city for your state,” said Rishe. “I think you will see many states continue this, because you do not want to be the state that remains exposed or disadvantaged.”