New Jersey Legislators Eyeing Tax Hike on Online Casino Revenue

In a move that could significantly impact the landscape of online gambling in New Jersey, a state senator has proposed a substantial increase in the tax rate applied to online casino revenue. Sen. John F. McKeon’s proposal aims to boost the state’s coffers but is likely to face staunch opposition from within the gaming industry.

Debate Ignites Over Proposed Tax Hike in New Jersey’s S3064

The proposed legislation, known as New Jersey’s S3064, is currently in its preliminary stages, having been pre-filed without a committee assignment or formal assessment by the New Jersey Office of Legislative Services. However, if enacted, the bill would raise the tax rate on online casinos and sports betting revenue to 30%, a considerable jump from the current rates of 17.4% and 14.25%, respectively.

Proponents of the bill argue that such a hike could result in a substantial increase in tax revenue for the state, potentially amounting to hundreds of millions of dollars. 

For instance, if the proposed 30% rate had been in effect since the legalization of online gambling in 2013, New Jersey could have collected nearly a billion dollars more in taxes from online casinos alone.

However, the proposed legislation is not without its detractors, particularly among the powerful lobbying groups representing Atlantic City’s brick-and-mortar casinos. These establishments, while benefiting from some revenue generated by online gambling, fear that a higher tax rate could diminish their share of the profits.

Indeed, the influence of Atlantic City’s casinos in Trenton cannot be overstated, with their lobbying efforts often yielding significant concessions from lawmakers. If these establishments mobilize against S3064, the bill may face insurmountable obstacles in the legislative process.

US States Navigate Revenue Boosts Amid Gambling Industry Pushback

While the proposal aims to bolster the state’s finances, its fate remains uncertain amidst the looming specter of industry opposition. As New Jersey lawmakers grapple with the balance between fiscal interests and gaming industry concerns, the future of online gambling taxation in the state hangs in the balance.

Other states are also deliberating tax increases on the gambling industry. For example, in his proposed budget for Fiscal Year 2025, Illinois Gov. J.B. Pritzker is advocating for a significant change in the taxation of sports betting. The proposal entails a considerable increase in the tax rate on sports betting revenue, from the current 15% to a hefty 35%. This adjustment, if implemented, aims to inject an estimated $200 million into the state’s coffers, representing a substantial boost to Illinois’ fiscal resources. At the same time, Ohio State Sen.

Niraj Antani has proposed legislation to reduce the tax burden on sports betting operators, sparking controversy over the state’s sports betting revenue. The bill challenges a recent doubling of the tax rate, implemented through the state budget, with critics questioning its potential impact on Ohio’s revenue stream.