New Jersey Senate Receives Bill To Consider Online Gaming Tax Increase

Article by : Erik Gibbs Apr 15, 2024

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The New Jersey Senate has ushered in a bill raising tax rates for online sports betting and casino operators, marking a significant development in the state’s gambling landscape.

Proposed by Senator John McKeon, Bill S3064 seeks to elevate tax rates for both sports betting and online casino activities to 30%, a notable increase from the current rates.

Presently, online sports betting operators face a tax rate of 14.25%, while iGaming operators are subject to a 15% tax and an additional 2.5% contribution to the Casino Reinvestment Development Authority.

Although initial reports of the bill surfaced in March, it has now officially been presented to the Senate, where it awaits further deliberation in the Senate State Government, Wagering, Tourism and Historic Preservation Committee.

Among its neighboring states, New York and Pennsylvania boast some of the nation’s highest online gaming tax rates, leading to substantially greater revenue generation compared to New Jersey.

In New York, operators contend with a staggering tax rate of 51%, while their counterparts in Pennsylvania face a rate of 36%.

Since its launch in January 2022, New York has amassed a remarkable $1.73 billion in tax revenue from online sports betting, derived from a handle of $39.2 billion.

In stark contrast, New Jersey’s tax revenue stands at just $286.7 million from a handle of $26.1 billion during the same period. Had New Jersey implemented a 30% tax rate during this timeframe, its total revenue would have soared to $609.7 million, significantly bridging the gap with its neighboring states.

Legislators in Illinois are echoing calls for an uptick in sports betting tax rates, mirroring similar movements in other parts of the United States. Governor JB Pritzker has tabled a proposal to significantly escalate the tax rate from 15% to 35% in his executive budget for fiscal year 2025.

Anticipating substantial fiscal gains, he envisions an extra $100 million flowing into the state’s coffers in the upcoming fiscal period.

Meanwhile, in Ohio, Governor Mike DeWine enacted legislation last year that doubled the tax rate for sports betting operators from 10% to 20%, reflecting a broader trend toward fiscal adjustments in the realm of sports wagering regulation.