Online casino and sports betting operators in New Jersey might soon be paying a lot more in taxes if Governor Phil Murphy’s latest budget proposal becomes law.
Big Shift Frowned Upon by Operators
The plan calls for a sharp increase in the tax rate on online gambling, jumping from 15% to 25% for casino platforms, and from 13% to 25% for sports betting apps.
While that new rate would still be far below New York’s hefty 51% tax, it represents a major shift for one of the country’s most successful gambling markets. Operators, predictably, aren’t happy about it.
The Governor’s office estimates the change would bring in an additional $402 million in annual revenue. That figure comes on the back of a booming 2024 gambling year, where New Jersey saw $6.3 billion in total gambling revenue, including $2.39 billion from online casinos, which marked a 24% jump from the year before.
FanDuel and BetMGM Speak Up Against the Tax
The industry warns that the hike could hurt more than it helps.
Both FanDuel and BetMGM have urged their New Jersey customers to speak out against the proposal.
“A tax hike will have a major impact on your favorite online games, putting promotional offers and the best odds at risk,” FanDuel wrote in a message to users.
There’s even bipartisan opposition to the plan in the state legislature. Senators John Burzichelli (D) and Mike Testa (R) issued a rare joint statement condemning the tax hike.
“Simply put, doubling the tax on online sports betting and iGaming is putting a New Jersey success story at significant risk,” the statement said.
The two senators also explained the tax increase “would negatively impact jobs, industry investment,” as well as New Jersey customers, while possibly affecting “future revenue growth for the state”.
For players, higher taxes might mean fewer bonuses and worse odds. Instead of the standard -110 line, bettors could start seeing -115 more often, a change that puts more money in the house’s pocket and less in yours.
A poll from Stockton University found that 58% of New Jersey residents supported the tax increase, but 85% of them don’t actually bet online, raising questions about how informed that support really is.
In September 2020, another Stockton University poll showed 45% of New Jersey voters were against a constitutional amendment allowing bets on college sports events taking place within state borders. The final state budget, and with it, the fate of this proposal, will be decided in June.