New Jersey’s Gambling Industry Fights Back Against Proposed Tax Hike
New Jersey’s gambling industry is pushing back against a proposed tax increase that would raise rates on online gaming and sports betting to 25%, up from 15% and 13%, respectively. The plan, introduced in Governor Phil Murphy’s fiscal year 2026 budget, is expected to generate $402.4 million in additional revenue. However, industry leaders, operators, and politicians argue that the increase could have damaging long-term effects on the state’s gaming market.
Industry Outcry and Customer Engagement
Casino operators and online sportsbooks have strongly opposed the proposal, warning that higher taxes could reduce investment, cut jobs, and weaken consumer incentives.
Companies like FanDuel and BetMGM have taken an unprecedented step by urging their customers to voice their opposition directly to lawmakers in Trenton.
Both operators launched campaigns encouraging users to send messages to legislators, arguing that the tax increase would be unfair and could drive customers toward unregulated offshore platforms.
Concerns Over Competitiveness and Market Stability
The proposed tax hike has sparked concerns about New Jersey’s competitive position in the gambling industry. With states like New York already imposing a 51% tax on sports betting, some fear that a similar burden in New Jersey will push operators to scale back promotions, rewards programs, and overall investment in the state.
Analysts suggest that reducing promotional spending could lead to lower customer retention and fewer new sign-ups, making the market less attractive compared to other states with lower tax burdens.
Additionally, illegal gambling platforms, which do not pay taxes or offer consumer protections, could become a bigger threat as players look for better odds and promotions outside regulated markets.
Political Opposition and Economic Concerns
Lawmakers from both parties have raised concerns about the impact of the tax hike. Senators John Burzichelli and Michael Testa have publicly criticized the proposal, arguing that the state should not be targeting a highly successful industry that already contributes significantly to the economy.
Meanwhile, financial analysts warn that some of the industry’s largest operators could face substantial losses if the plan moves forward. According to Jefferies Equity Research, parent companies of major brands would be hit hard:
- Flutter Entertainment (FanDuel) could see a $106 million reduction in earnings.
- Entain (BetMGM) might suffer a $62 million loss.
These projections add fuel to the industry’s argument that a higher tax rate would discourage innovation, investment, and expansion, potentially leading to job losses and lower overall revenues in the long run.
While Murphy’s administration argues that the increase would boost state revenue and support public services, the growing opposition suggests the plan could face significant legislative hurdles. Some lawmakers have even floated the idea of raising the tax rate above 25%, with figures as high as 30% being discussed in preliminary talks.
Recommended