After just over a decade of legalized online gaming in the Garden State, a New Jersey state senator is looking to up the ante when it comes to playing casino games and betting on sports online.
As the state is expected to face more than a $2 billion budget shortfall in the coming years, Sen. John McKeon’s (D) is seeking to double taxes on the online gaming industry. He said there is room for a tax increase when looking at some other gambling states.
Despite bringing in $414 million for the state in 2023, he noted that the state’s current tax rate is “just not commensurate with where everybody else is, and we can use the revenues,” according to the New Jersey Monitor. He added: “This is pure profit, the majority of which is deriving from online betting, sports betting in particular.”
A Look at the NJ Gambling Tax Rate Proposal
New Jersey has been a leader in the industry since launching online gaming in 2013. The state later took up the fight to overturn the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that put a virtual ban on all sports betting outside the state of Nevada. The state sued, arguing that the law was unconstitutional and the Supreme Court overturned the law in 2018. The NJ gambling venture was followed by Pennsylvania, Michigan, West Virginia and other states once PASPA was overturned.
The state currently has a 15% tax rate for online casino wagering and 13% for online sports betting. McKeon’s plan would increase both of those to 30%.
New Jersey has one of the lowest online gaming and sports betting tax rates in the country. New York’s online sports betting tax is set at 51% with Pennsylvania’s at 36%. McKeon says the move would have minimal impact on average New Jersey families.
“I was, in part, looking as to areas that wouldn’t take money out of the pocket of hard-working New Jerseyans, but out of an industry that, this year alone, on real money online gaming has profited $1 billion,” he said.
The state’s online gaming industry saw $1.9 billion in revenue in 2023, a rise of 16% compared to 2022. The upward trends of New Jersey gaming revenue has continued this year. The month of March saw online operators pull in revenue of $182.3 million, up 27.9% compared to $142.6 million in February 2023. Year to date, online gaming revenue in the Garden State has reached $365.6 million, an increase of 23.7% from $295.5 million for the same period in 2022.
