Experts believe that New Jersey would be the next state to raise its tax on iGaming as the state’s online casino and sportsbooks continue flourish. While the idea isn’t anything new, implementing such a tax hike could end New Jersey’s reputation as a gambling-friendly state.
Truist Securities Believes NJ Would Adopt a Higher Tax
The idea of increasing New Jersey’s online gaming tax was initially proposed by Gov. Phil Murphy earlier this year. He called for increasing the tax for both online betting and gaming to 25%, allowing the state to generate extra money for a variety of initiatives.
For reference, New Jersey currently takes a 15% cut off iGaming operator’s revenues and a 13% cut off those of online sportsbooks.
While Murphy’s changes might be too drastic for gambling-friendly New Jersey, experts believe that a smaller tax hike could be on the horizon. According to Truist Securities analysts, the state is considering a tax hike that would increase the money paid by online operators while still keeping the tax rate under 20%.
Trust Securities broker Barry Jonas said that he expects lawmakers to increase the GGR tax on online gaming and sports betting to 19.75%. He added that promo deductions could mitigate some of the harm while still generating profits for the state. As a result, New Jersey’s operators are unlikely to introduce surcharges or make their products less appealing, Jonas asserted.
Jonas’ comments alluded to Illinois where a significant tax hike forced leading sportsbooks to implement a surcharge on each bet. Operators had repeatedly warned that higher taxes would force them to implement customer-unfriendly measures which could push players to the more dangerous black market.
New Jersey’s Battle with Kalshi Rages on, Smoking Ban Debates Continue
In other news, New Jersey just received backing from 34 state attorneys general, several tribes, and the American Gaming Association (AGA) in its fight against Kalshi. The Garden State has remained opposed to prediction markets, arguing that they circumvent the local gambling rules. While operators of such products have argued that they should answer only to the Commodity Futures Trading Commission (CFTC), many have remained unconvinced.
In the meantime, New Jersey’s casino smoking debate continues to get red hot as a change in leadership looms. While Democratic nominee Mikie Sherrill has supported casino workers, expressing sympathy to their woes, Republican candidate Jack Ciattarelli remains reluctant to force casinos to adopt a ban.