New Jersey is adding to the list of states that are considering a sports betting tax increase.
On Tuesday, Gov. Phil Murphy released his Summary of Budget Recommendations for FY2026 with a plan to spend a record $58.1 billion. Murphy has proposed the estimated state expenditures in a budget plan that includes a tax increase on gambling revenue.
The budget would raise the state’s tax rate on online sports betting and iGaming to 25%. New Jersey currently levies a 13% tax rate on sports betting with iGaming at 15%.
The budget would see New Jersey close FY2026 with a $6.3 billion surplus with the help of an iGaming and sports betting tax increase that is projected to generate an additional $402.4 million in revenue. The state’s Casino Revenue Fund is estimated to receive an additional $322.6 million, according to Murphy’s budget plan. In FY2026, the budget plan sees the state’s General Fund raise an additional $80 million behind sports betting.
Murphy’s latest budget plans is poised to draw concerns from operators in the state.
“There is going to be significant pushback by operators but there’s also going to be pushback in the legislature,” an anonymous New Jersey insider told SBC Americas. “It [online gambling] is an industry that is continuing to do well in New Jersey and we want to continue to support it.”
New Jersey lawmakers have a June 30 deadline to finalize a budget plan for FY2026.
States outside NJ also consider tax rate hikes
Earlier this month, Ohio Gov. Mike DeWine released his budget plan for fiscal years 2026-2027. The plan considers increasing the state’s sports betting tax rate from 20% to 40%.
According to a report from the Columbus Dispatch, DeWine estimates the tax increase to generate between $130 and $180 million in additional revenue annually for Ohio.
The revenue could potentially go toward renovations at Paycor Stadium, home of the Cincinnati Bengals since 2000. The proceeds could also be allocated toward efforts to build a domed stadium for the Cleveland Browns at a price tag of $2 billion, per the AP.
Maryland Gov. Wes Moore’s budget plan also proposes a tax increase on sports betting. Moore’s FY2026 plan would increase the tax rate from 15% to 30% as the state faces a $3 billion budget gap. His proposal also considers increasing the state’s table game tax rate from 20% to 25%. The tax hike is projected to generate roughly $95.4 million in revenue.
