NJ Lawmakers Pass New Gambling Tax and Crack Down on Sweepstakes Casinos

New Jersey legislators have given the green light to a wide-ranging set of gambling reforms. These changes include steeper tax rates for online betting and a fresh prohibition aimed at sweepstakes casinos. Lawmakers passed these measures on June 30. They now sit on Governor Phil Murphy‘s desk, who will make them law with his signature.

New Jersey Sets Flat 19.75% Tax for Online Gambling, Targets Sweepstakes Casinos

The new budget rules have an influence on tax rates for online gambling businesses. Sports betting sites, internet casinos, and daily fantasy sports (DFS) companies will now pay a flat 19.75% tax. Before this change, these businesses paid between 10.5% and 15%, based on the kind of gambling they offered. At first, Governor Murphy wanted to raise taxes to 25%. However, after the gaming industry pushed back, lawmakers decided on a lower rate.

This tax hike is seen as a middle ground. It also puts New Jersey in the same league as states like Maryland and Louisiana. These states upped their taxes on mobile sports betting, too. In Illinois, similar moves led betting companies like DraftKings and FanDuel to start charging fees to their customers.

At the same time, lawmakers also approved Bill A5447, which targets sweepstakes casinos that operate in legal gray areas. The bill labels these platforms, which often use virtual currencies you can exchange for real prizes, as unlicensed gambling. It suggests fines up to $250,000 for those who break the rules more than once.

People who back the ban say these sweepstakes platforms do not have enough oversight and do not protect consumers well. However, the Social and Promotional Games Association (SPGA) does not like the bill. They are asking the governor to reject it. The group says these platforms follow the law. They warn that this law could take away good options for both casual and competitive players.

New Jersey Tightens Gambling Rules, Eyes High School Education on Addiction

A5447 does not just deal with sweepstakes. It also brings in new criminal penalties to keep betting fair. The bill would make it against the law to bet using someone else’s account or to bet for someone else when the stakes are high. Some people, like Joe Brennan Jr. from Prime Sportsbook, think the wording is too vague. They worry it might make things like public sports talk or sharing tips illegal, reported Covers.

At the same time, people are worried about more and more young people gambling. This has led to further restrictions. Another bill wants New Jersey high schools to teach students about gambling addiction. If it passes, schools would have to give lessons on the financial risks and mental effects of gambling.

The state’s Council on Compulsive Gambling supports this idea. Overall, the fresh laws show New Jersey is getting stricter about online betting. The state wants to balance making money with being responsible to society. It looks like New Jersey aims to be a leader, not a follower, when it comes to gambling rules.