New Jersey Lawmakers Divided on Proposed Gambling Tax Hike

New Jersey is another US state where lawmakers are considering increasing gambling taxes. Late last month, Gov. Phil Murphy pitched a gambling tax hike, proposing an increase on the levy applicable for online gaming and sports betting. While most lawmakers oppose increasing taxes, one Democratic Senator spoke in favor of the proposed gambling tax increase.

Betting, iGaming Tax Rate Proposal Praised by One Senator

That is the case with Sen. John McKeon, who showed support for Gov. Murphy’s proposal. The Senator explained that for more than a year, he has attempted to push gambling tax rate increase. For example, McKeon proposed S3064 last year, a bill that called to increase the taxes for online casino gambling from 15% to 30%.

A similar increase was proposed for the sports betting tax rate, which under the proposal would grow to 30% from the current rate of 13%. Ultimately, the proposal didn’t get traction, which left the gambling taxes at the same rates.

Unlike McKeon’s proposal, Gov. Murphy called for a lower increase in the gambling tax rate. Per a recent budget proposal, the Governor seeks to increase the tax rate on online betting and online casino gambling to 25%. If that budget is approved, the tax on betting would increase nearly two times, considering its current rate at 13%.

“I wholeheartedly support Governor Murphy’s proposal to increase the tax on iGaming and sports betting. The issue of raising these tax rates has been something I have championed for over a year now, so I commend the Governor for recognizing the revenue-generating potential of these rapidly growing industries for our State,“

wrote Sen. John McKeon

Lawmakers Post Arguments for and Against the Gambling Tax Hike

After the release of the proposed budget, Sen. McKeon acknowledged the importance of raising gambling taxes as a way to boost the state’s financial stability. He added that such an increase can also dedicate more resources to gambling support and treatment across the state.

McKeon added: “Online gambling and sports betting companies have not paid their fair share in taxes.” The Democratic Senator spoke about the existing tax rates for online betting and iGaming in New Jersey, explaining that they are “comparatively low” when compared to nearby states such as New York and Pennsylvania.

Unlike the support of McKeon, Gov. Murphy’s budget proposal faced disapproval among other lawmakers. For example, Sen. John Burzichelli spoke about New Jersey’s success story when it comes to online sports betting and iGaming, adding that a tax rate may put the sector “at a significant risk.”

Burzichelli warned that an increase in the gambling taxes may threaten “all of the progress New Jersey has made.” He also predicted that a tax hike may ultimately impact investment in the sector and even affect jobs. This, in turn, can negatively impact the revenue New Jersey derives from the activity, Burzichelli wrote.