New Jersey is raising its tax rate on online casinos and sports betting, but state lawmakers have agreed on a lower rate than Gov. Phil Murphy proposed earlier this year.
On Monday, Murphy and New Jersey’s legislature agreed to a deal levying a 19.75% tax rate on gross gaming revenue for online casinos and sports wagering operators before the state plans to finalize a new budget plan next week. Earlier this year, Murphy released his budget for FY2026 with a plan to spend a record $58.1 billion. His plan proposed raising the state’s tax rate on sports betting and iGaming to 25%. New Jersey currently levies a 13% tax rate on sports betting while online casinos in the state are taxed at a 15% rate.
Murphy’s original proposal of a 25% tax rate was projected to generate an additional $402.4 million in revenue helping New Jersey close FY2026 with a $6.3 billion surplus.
The proposed 25% tax rate was met with opposition by trade associations and operators.
FanDuel asked its customers for help in pushing back against the tax hike. The Sports Betting Alliance (SBA) and the Casino Association of New Jersey also opposed the hike. The SBA includes FanDuel, bet365, DraftKings, BetMGM and Fanatics.
Earlier this month, bet365 became the first new member of the SBA since 2021.
Murphy has until June 30 to finalize New Jersey’s budget plan for next fiscal year. The budget also proposes increases in funding for public education and housing.
New Jersey adds to tax rate increases
The Garden State will be the third U.S. market to raise its tax rates on online gaming this year.
Earlier this week, Louisiana Gov. Jeff Landry signed a bill raising the state’s online sports betting tax from 15% to 21.5%. The piece of legislation mandates a portion of the tax revenue to be allocated toward a fund designed to support college athletic departments.
The law, which goes into effect on Aug. 1, prohibits tax revenue from sports wagering to be used for NIL payments to student-athletes at institutions that are covered under the bill.
Maryland is also implementing a tax rate increase on online sports wagering after Gov. Wes Moore signed a budget increasing the rate from 15% to 20%. Illinois is adding a 25-cent flat tax on every online sports bet placed in the state after introducing a sliding scale tax model last year. The scale has operators taxed up to 40% based on their revenue.
Ohio and Wyoming are also considering tax rate increases on online gaming.
