A bill to hike the tax rates for New Jersey online sports betting and online casino operators has officially been introduced to the Senate.
Bill S3064, sponsored by Sen. John Mckeon, proposes to increase tax rates for sports betting and online casino to 30%.
Currently online sports betting operators are taxed at 14.25% while iGaming operators currently pay 15% in tax, plus another 2.5% to the Casino Reinvestment Development Authority.
The bill was first reported on in March, however it has now been introduced to the Senate where it has been referred to the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
New Jersey following in the footsteps of neighboring states
New Jersey’s neighboring states of New York and Pennsylvania have some of the highest online gaming tax rates in the country and as such have taken in much greater revenue than New Jersey.
In New York the rate is 51% while Pennsylvania operators pay 36%.
Since launching in January 2022 New York has taken $1.73 billion in online sports betting tax revenue from $39.2 billion, whereas New Jersey has taken just $286.7 million in tax revenue from $26.1 billion in handle.
If New Jersey had been taxing at 30% over that span, its total revenue would be $609.7 million.
Illinois also considering a tax hike
Elsewhere in the U.S., legislators in Illinois have also advocated for an increase in sports betting tax.
Gov. JB Pritzker has proposed that the tax rate should more than double from 15% to 35% in his executive budget for fiscal year 2025. He forecasts that the change would bring in an additional $100 million in tax revenue for the state in the next fiscal year.
Last year, Gov. Mike DeWine signed into law an increase in tax rate from 10% to 20% for sports betting operators in Ohio.
