New Jersey Considers Raising Online Gambling Taxes to 30%

Senate Bill 3064 was recently tabled in the New Jersey Senate and would raise online gambling taxes in New Jersey. At present, online casino is taxed at 15% and online sports betting is taxed at 13%. The new bill would raise tax rates for online casino and sports betting to 30%. 

The bill was officially submitted by Senator McKeon on Monday, 8th April, and it has been referred to the State Government, Wagering, Tourism & Historic Preservation Committee. The senator said that New Jersey’s current tax rates for online gambling are not commensurate with other states and could use extra revenue. 

Increase in New Jersey’s online gambling taxes 

The bill isn’t facing much time pressure as New Jersey’s legislative session will only expire in December. If it’s approved, it could apply to a NJ online casino as early as January 2025. Casinos aren’t likely to take the tax hike lying down and their lobby has become powerful in recent years. 

Neighboring states, New York and Delaware have high tax revenue rates at 51% and 50%, respectively. Pennsylvania’s 54% online slots tax is one of the highest. The new tax rate would put New Jersey’s online gambling tax rates above those of Connecticut, Michigan, and West Virginia. 

Effect on sportsbooks

A 30% increase would put pressure on New Jersey’s sportsbooks and raise taxes to among the highest in the U.S. Neighboring New York charges a 51% tax on online sports betting revenue, and Pennsylvania imposes a 36% tax.

New Jersey in the spotlight

The gambling industry in New Jersey has been in the spotlight since 2024. In January, a bill to launch racetrack slots and limit advertising was reintroduced. 

A study that came out in January claimed that positive tax contributions were ‘canceled out’ by the costs of gambling harm. This contradicts the findings of a previous study in 2019. This study showed success in casinos, which generate over 6,500 jobs, and more than $400 million in employees’ wages from 2013 to 2018. 

New Jersey’s gambling revenue

New Jersey’s gambling revenue reached new heights in 2023. It hit $5.78 billion, which is a new record. Looking at US economic trends and how online tax revenue has paid dividends for other states, the current changes could give the New Jersey economy a boost. 

New Jersey wouldn’t be the first to raise online gambling taxes but raising them to 30% would be quite a change. This would still keep it lower than some other states. There is still ground to cover before the bill can take effect. If it passes, it could set the stage for other states to increase their online gambling taxes. 

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