Sin Tax or Student Tax: A Different Way to Look at Sports Wagering Revenue for HBCUs

Charles Bishop of Inside the HBCU Sports Lab recently posed a devil’s advocate question about whether sports wagering revenue should be directed to HBCU athletic departments. His framing: What are the moral implications of an HBCU program becoming financially tied to gambling revenue? How does an athletic director explain a “sin tax” relationship to donors and faith communities?

This is a question worth asking, and there is a version of that conversation every AD at Grambling and Southern is going to have to be ready for. But before the ethics debate around sports wagering revenue gets too far down the road, it is worth accounting for what HBCU programs are already doing to keep the lights on, and who is already carrying the weight.

What students are already paying

Virginia publishes detailed mandatory fee data for every public institution in the state through the State Council of Higher Education. For the 2025-26 academic year, Norfolk State students pay $1,960 in athletic fees. A year ago, it was $1,878. Virginia State students are paying $1,515 per year, up from $1,451.

That is just the line labeled “Athletic” in the state’s fee report. It does not include the fitness center fee, the student center fee, the student activity fee, or anything else that feeds operations adjacent to athletics. Those go up too. And none of it is optional. Whether a student ever sets foot inside a gymnasium or not, the fee is on the bill every semester.

That is the current model. And when you look at what it adds up to at the program level, the stakes of this conversation shift considerably.

What the financial data actually shows

Every Division I program reports its finances annually to the NCAA. When you pull that data across the HBCU programs tracked here, the degree to which these departments run on mandatory student money is not subtle.

Source: NCAA Membership Financial Reporting System, FY2025. Data via Data Driven HBCU financial dashboards.

Sit with the Morgan State number for a moment. The athletic department brought in $13.7 million in fiscal year 2025. More than $10.5 million of that came directly from mandatory student fees. NC A&T pulled in $10.7 million in student fees, compared with $22.5 million in total revenue. Norfolk State, which runs the highest-revenue HBCU program in this cohort, still drew nearly $9.7 million from its students. None of those students voted on the fee. They enrolled, and the charge was waiting for them.

This is the financial reality that Louisiana and North Carolina were looking at when they wrote their sports wagering legislation, and it shapes why those decisions make sense when you actually read what the bills do.

What Louisiana and North Carolina actually passed

Louisiana’s House Bill 639 was signed into law last year as Act 298. It raised the online sports wagering tax from 15 percent to 21.5 percent and dedicated 25 percent of that revenue to a new Supporting Programs, Opportunities, Resources, and Teams Fund, administered by the Board of Regents. The money goes to athletic departments at Louisiana public universities that compete in Division I football, including Grambling State and Southern University at the FCS level.

The law names specific permitted uses: scholarships, insurance, medical coverage, facility enhancements, Alston awards, and litigation settlement fees. That last item is deliberate. Louisiana built the House settlement into the funding structure from the start, giving eligible programs a way to absorb those costs without immediately pushing them back onto students. The law also bars SPORT Fund money from replacing any existing scholarship dollars.

North Carolina’s 2026 budget raises the online wagering tax from 18 percent to 23 percent and preserves a $300,000 annual floor payment for all five public HBCUs: NC A&T and NCCU at Division I, plus Elizabeth City State, Fayetteville State, and Winston-Salem State at Division II. NC A&T and NCCU can also compete for additional Class I and Class II pools that could push their annual total to $3.6 million per school. HBCU Gameday has the full breakdown.

In both states, the money originates with someone who chose to place a bet. An operator collects it, pays taxes on the net proceeds, and the state routes a share of that tax revenue to athletic departments. The HBCU on the receiving end is accepting a state appropriation, the same basic mechanism as any other state higher education funding.

Sports wagering is one of several non-traditional bets HBCU athletics is already making

The wagering revenue debate does not exist in isolation. Across the HBCU landscape, programs and conferences are already reaching for non-traditional revenue structures because conventional funding models are not keeping up with rising costs.

In June 2026, the SWAC announced that SWAC TV had joined Mercurius Media Capital as a Strategic Limited Partner in a media-for-equity venture fund. The structure converts SWAC TV’s advertising inventory into capital for MMC’s portfolio companies. In return, the conference receives equity stakes rather than immediate cash. It is a calculated risk. The SWAC is trading present ad revenue, money it could use right now, for equity that pays out only if the portfolio companies perform over time. Whether that bet lands will take years to know.

Alcohol sales are another area where HBCU programs have quietly moved. A number of schools now allow beer and wine inside their stadiums, and several of the biggest showcase events in HBCU athletics take place in venues where alcohol has long been sold. The Bayou Classic at the Caesars Superdome, the Florida Classic in Orlando, the State Fair Classic at the Cotton Bowl, none of those facilities are dry. Programs playing in those venues are generating concession and sponsorship revenue connected to alcohol sales. That conversation has not triggered the same ethical scrutiny that sports wagering revenue is drawing now.

The broader point is that HBCU athletic departments are already operating in spaces that carry some degree of controversy or complexity because the straightforward revenue options are not sufficient. Sports wagering tax revenue is the latest example of that, not the first.

The Grambling audit puts it in focus

In May 2026, the Louisiana Legislative Auditor published an audit of Grambling State’s athletic department covering fiscal year 2025. The department spent $14.3 million and brought in $9.2 million, a $5.08 million deficit. Auditors also flagged discrepancies in Grambling’s NCAA financial reporting: the school overstated Pell Grant recipients by 62 students and inflated Pell dollar amounts by $383,493 relative to its own records.

A $5 million deficit on $9 million in revenue is not something you patch by tightening the per diem policy. It reflects a structural gap between what these programs are expected to field and what the available revenue actually supports. When state appropriations and donor support fall short, programs reach for students. That has been the default for a long time, and the fee data in the table above shows how thoroughly that dynamic has taken hold at programs across the country.

The full financial picture at Grambling and Norfolk State is available through the Data Driven HBCU dashboards.

The missing half of the ethics conversation

Bishop’s concern about institutional messaging is real. Athletic directors at schools receiving SPORT Fund money will have conversations with stakeholders who are uncomfortable with the source of the funding. Some donors, some alumni, and some faith communities connected to these schools hold strong views about gambling. That is a legitimate part of the picture, and anyone dismissing it has not spent much time around HBCU alumni networks.

But the same standard does not seem to apply to the student fee. Nobody is calling a town hall to ask Morgan State students how they feel about three-quarters of their athletic department’s revenue coming out of mandatory assessments. Nobody is asking the nursing student at Grambling, who came in on financial aid that does not quite cover everything, whether she agreed to fund the football program. The fee goes up quietly each year, built into the cost of attendance, absorbed through a combination of loans, aid, and whatever families can cover out of pocket.

Sports wagering tax revenue sent to HBCU programs through a state appropriation comes from adults who choose to participate in a legal, regulated activity. It does not come from a student’s bursar account. Given the SWAC’s media equity bet, the alcohol revenue that now flows through HBCU showcase events, and the student fee dependency that the financial data shows across this entire landscape, the ethics of sports wagering revenue deserve to be weighed against everything that is already happening, not evaluated in a vacuum.