New Jersey – State Senator John McKeon is lobbying to have casinos and online sports betting to incur higher taxes to help the state’s ledger which has been experiencing a revenue crunch.
As the primary sponsor of Bill S3064, Senator McKeon states that if approved, the Bill would raise both tax rates to 30%, from 15% for online wagering and 13% for online sports betting. The revenue streams brought the state more than $414 million in 2023.
The taxes would be used to add more revenue to the Garden State which is still recovering after the post-pandemic boom that has steadily subsided. Senator McKeon stated that the proposal targets casinos and racetracks, and shouldn’t impact New Jersey residents:
“I was, in part, looking as to areas that wouldn’t take money out of the pocket of hard-working New Jerseyans, but out of an industry that, this year alone, on online gaming has profited $1 billion.”
According to the official New Jersey Division of Gaming Enforcement, the figures show that the Garden State had taken $1.72 billion in sports betting handle for January. This is a record-high figure, and the fifth consecutive month the state had taken more than a billion dollars or revenue in bets and a 136% year-over-year spike.
New Jersey’s Low Taxes on Online Gambling
Compared to other nearby states like New York, which charges a 51% tax on casinos’ takings from online sports betting, and Pennsylvania imposes a 36% tax, New Jersey has one of the lowest tax rates for online casinos and sports betting.
New York has reaped $1.73 billion in online sports betting tax revenue from $39.2 billion in handle since launching in January 2022, whereas New Jersey has taken just $286.7 million in tax revenue from $26.1 billion in handle.
Increasing Online Gambling Tax Rates in Other States
Raising online gambling tax rates is an issue in other states in the US. For instance, in Illinois, Governor JB Pritzker has advocated for the sports betting tax rate to be more than doubled from 15% to 35% in his executive budget for fiscal year 2025. Unsurprisingly, major gambling corporations argue it’ll block growth in a market that has seen a significant upswing over the past years.
Meanwhile Ohio Gov. Mike DeWine approved a sports betting tax bump from 10% to 20% last year, much to the chagrin of sports betting corporations operating in the Buckeye State. That said, recent reports have indicated that sports betting has seen a steep decline in revenue of 41%. However, its casino revenue has rebounded somewhat to $83.5m last February. This was 11% up on January’s total of $75.2m, which was Ohio’s second-lowest monthly report ever.
Other Gambling Protection Targets
Other parts of Bill S3064 are also targeting sports betting apps that allow New Jersey residents under the legal age of 21 to place non-monetary bets. Given that New Jersey’s legal age for betting is 21, apps that promote betting which underaged residents can easily access are barred in the Bill. This direction is to curb the influence of such apps that can instill potentially dangerous gambling habits in the youth.
Speaking of responsible gambling, a third bill would allow individuals to voluntarily place themselves on a list banning from gambling in the state. Residents can file civil suits against casinos that allow them to gamble on their slot games, card games, and live dealer table games without concern for their financial, physical, or mental well-being or as a result of intentional misconduct.
That bill is partly a response to a January federal court ruling that found New Jersey casinos had no obligation to exclude problem gamblers.
Last Updated on by jonathan r
