New Jersey Hikes Online Betting Taxes to 19.75%
New Jersey’s lawmakers and Governor Phil Murphy struck a tentative budget deal that will raise taxes on online sports betting and casino gaming to 19.75%, up from 13% and 15%, respectively.
A Tax Bump in the Garden State
The agreement, part of a $58.1 billion state budget, aims to plug a $1.5 billion deficit while funding programs like the Casino Revenue Fund for seniors and people with disabilities.
The budget faces a tight deadline, with a final legislative vote planned by June 27 and a signing by June 30, before the new fiscal year kicks off on July 1.
Originally, Murphy pushed for a 25% tax rate to rake in an extra $402 million, but pushback from the industry led to the lower 19.75% compromise. The increase still stings for operators, who worry it could drive bettors to unregulated offshore platforms.
Industry Sounds the Alarm
The tax hike has sparked a chorus of concerns from betting companies. Mark Giannantonio, president of the Casino Association of New Jersey, warned that higher taxes could backfire, pushing players to offshore sites with better odds and no state oversight. “This could hurt the regulated market and cut state revenue in the long run,” he told NJ.com.
Jeremy Kudon of the Sports Betting Alliance echoed this, highlighting the industry’s role in creating jobs and tax dollars, and arguing that a 25% rate would’ve been a gut punch.
Operators cautioned that the increase could mean fewer promotions and less competitive odds, making it harder to keep players. However, Truist Securities analyst Barry Jonas suggested that promotional deductions might soften the blow, keeping operators from passing costs directly to customers.
Governor Murphy stressed the need to balance revenue goals with a competitive market, but the industry’s still bracing for impact.
Part of a National Trend
New Jersey’s move isn’t happening in isolation. Other states are tightening the screws on betting taxes too. Maryland’s bumping its online sports betting tax to 20% from July 1, Louisiana’s going to 21.5%, and Illinois has rolled out a tiered system hitting 40% with a 50-cent per-bet fee.
North Carolina, Ohio, and Massachusetts are also mulling hikes, some as high as 51%.
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