John McKeon of New Jersey has introduced a bill that would increase the tax on online sports betting and gambling to 30%.
Online gambling and sport betting is currently taxed 15% and 13% respectively of the gross gaming revenues.
The Senate Bill 3064, which was filed the previous week, was officially introduced to the public on Monday 8th April. The bill has been referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee.
The bill, if passed, would amend Section 17 (C.5-95.19) of P.L.2013 c.27 which specifies online gambling tax amounts. The bill would amend Section 7 of the P.L.2018 c.33, (C.5A-16), which deals with sports betting tax.
If lawmakers approved the proposal, the law would go into effect the next day after the date that the legislation was passed, according to the text of the bill.
New Jersey’s gambling tax: how does it compare to other states?
New Jersey’s 18 mobile sportbooks would be burdened by a 30% tax rate, which is among the US’ highest. New York has the highest sports betting tax in a highly competitive market at 51%, followed by Pennsylvania with its 36% GGR levies.
Delaware, New Hampshire, and Rhode Island, among others, tax between 51 and 50 percent of GGR on operators, while all of them run state lottery monopolies.
New Jersey has the lowest internet gambling tax rate and currently 30 active igaming websites. The state would be ranked above Connecticut (18% GGR, which will rise to 20% in five years), Michigan (80%) and West Virginia (15%) with a 30% GGR.
Pennsylvania has the highest tax rate on slot machines at 54%, while table games only have a 16% tax.
Ohio has set the precedent in tax increases.
If New Jersey follows the plans of Senator McKeon, then it will follow Ohio and double its tax rates.
Mike DeWine’s budget for 2024-25, which he presented in July of last year, saw the Buckeye State governor increase the tax rate from 10% to 20%.
DeWine’s relationship with industry soured only days after the launch of sports betting, and it was primarily due to advertising. Since then, the state Casino Control Commission is quick to take action against perceived sportsbook oversaturation.
New Jersey in the spotlight
New Jersey’s gaming industry is the topic of many discussions in 2024. Sen. Joseph Pennacchio introduced a new bill in January to limit the advertising and launch slot machines at racetracks. This bill has been introduced multiple times since 2014, but failed to progress beyond the committee stage by 2020 or 2022.
The National Economic Research Associates, commissioned by Campaign for Fairer Gambling in the same month, conducted research that revealed New Jersey’s igaming industry to be “detrimental” for the economy of the state. The study found that the positive impact of the igaming market on the state’s economy was “cancelled” out by gambling-related harm.
The 2019 study compiled for iDEA Growth by Gene Johnson and Dr Alan Meister, Meister Consulting. Internet casinos alone created $401.0m of employee wages, and 6,552 jobs full time between 2013-2018.
The study found that over the five years, legal gaming generated $259.3 million in taxes for state and local governments. This includes $178.9 million in gaming tax.
New Jersey gambling revenues reached a record high of $5.78bn in 2023. The numbers for January were still high, with $559.1m of revenue. This is up by 28.0% on the previous year.
