New Jersey Discussing Tax Hikes For Online Gambling
New Jersey Governor Phil Murphy is proposing a significant tax increase on both NJ online casinos and sports betting websites in his state’s budget for the 2026 fiscal year. If approved, the tax rate on online casino gambling in the Garden State would jump from 15% to 25%. Meanwhile, taxation of sports betting apps would be going up from 13% to 25%.
Even at 25%, that’s still less than half of what the same sites are paying in taxes across the state line in New York, which has a 51% tax rate. At the same time, a 10-12% tax increase is a massive hit and certainly figures to make a major impact on the industry if New Jersey goes ahead with the hike.
Why New Jersey Wants This Tax Increase
Governments have never met a dollar that they didn’t want to tax. Murphy’s office estimates that the respective tax increases on online gambling could generate a $402.4 million increase in annual revenue for the Garden State.
During the calendar year of 2024, New Jersey garnered $6.3 billion in total gambling revenue. At New Jersey online casinos, sites were displaying an across-the-board increase in revenue of 24% over the previous year, pulling in a record amount of $2.39 billion.
Impact Of The Tax Increase On The Industry: FanDuel, BetMGM Push Back as NJ Eyes 25% Gambling Tax
It didn’t take long for the tax hike proposal to raise a hue and cry among the movers and shakers within the online betting industry. Both FanDuel and BetMGM immediately contacted their New Jersey customer base, requesting that they protest the tax increase to their local state representative.
“A tax hike will have a major impact on your favorite online games, putting promotional offers and the best odds at risk,” FanDuel in its letter to customers.
In a rare occurrence among today’s polarized political landscape, State Senators John Burzichelli, a Democrat and Mike Testa, a Republican, released a joint statement condemning Murphy’s 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 read. “Any effort to increase this tax on New Jerseyans threatens all of the progress New Jersey has made, especially at levels that would make New Jersey’s customers too heavily taxed.
“A tax increase would negatively impact jobs, industry investment, and our New Jersey customers, and it could affect future revenue growth for the state.”
People in general are opposed to any attempt at raising taxes. However, there’s almost a sense of apathy from the general public regarding this proposed increase. A Stockton University poll discovered that 58% of respondents in New Jersey approved of the tax increases on online gambling. However, pollsters also discovered that 85% of those polled did not participate in online gambling of any sort.
What Does This Mean To You? High Stakes: NJ Gamblers Face Tax Hike That Could Hit Bonuses, Odds
If you’re someone who wagers at NJ online casinos or via sports betting apps in New Jersey, then should this tax increase go through, it’s going to cost you.
More taxes taken out of the pot means less revenue for every online betting site. And just like any other business, when costs increase, that cost will be passed on to the customer.
With taxes set to rise from 15% to 25%, New Jersey bettors may see fewer promos and worse odds. Industry and lawmakers push back ahead of June budget.
NJ.bet experts
One method to do so would be to make bonus and promotional offers less lucrative for players. Odds on games could also be juiced. Instead of the standard takeout of -110, betting lines of -115 may become more commonplace. That increases the amount going to the house and thus, also lowers your payday on a winning wager.
Beyond the obvious effects, less money coming into the online betting sites would also impact the amount of sponsorship dollars these sites will be doling out. Pro sports franchises draw plenty of sponsorship money from betting sites. If that’s cut off, or even reduced, it might mean your favorite team won’t have the money to sign that coveted free agent who could prove to be a difference maker during a championship run.
New Jersey’s budget won’t be finalized until June, so there’s still time for the Governor to change his mind on this uptick in online betting taxation.
Will NJ Gamblers Pay the Price? Murphy’s Tax Plan Under Fire. Let’s see!
