New Jersey Senator Proposes Tax Increase for iGaming and Sports Betting

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It’s not an April Fool’s joke. One senator from New Jersey has proposed increasing the effective tax rate for online iGaming and online sports wagering. According to the sender, New Jersey’s current tax rates are “just not commensurate with where everybody else is, and we can use the revenues.” 

The state of New Jersey was one of the first states to welcome online casino and sports wagering apps to market. Because of this, many experts believe the state was a little too eager and left a lot of tax revenue dollars still on the table. The neighboring state, New York, for example, just legalized sports wagering in 2022 with 51% of sports betting winnings going to the state government. In Pennsylvania, they impose a 36% tax rate on online casino and sports wagering revenue. 

Currently, New Jersey uses a 15% tax rate for online casino gaming and a 13% for online sports wagering. Senator John McKeon (D-Essex) has proposed an increase to 30% for both online gaming and sports wagering. The tax rate change would more than double the amount of tax revenue coming into the state of New Jersey from online gaming. 

Senator McKeon reminded state officials that Governor Phil Murphy’s recent spending plan for the physical year that begins in July includes a $2.2 billion structural deficit. Senator McKeon argued that an increased tax rate for online casino gaming and sports wagering would help make up for some of the deficit. 

The Casino Association of New Jersey’s president, Mark Giannantonio, has already commented on the news, stating, “The Casino Association of New Jersey strongly opposes any proposed tax increase for online gaming.”

Other Gaming Protections Included on Bill

Senator McKeon also included gambling protection language in the bill he proposed. The bill would effectively prohibit the operation of “no-wager gambling apps.” These are websites and apps that are allegedly made by the same companies and contractors as real money casinos but allow anyone of any age to wager or place “practice bets.” 

“You go online and it doesn’t say Draft Kings, but it’s affiliated with them,” said Senator McKeon. “And it exactly mimics that site, so if you’re 15, 14, 12, or 18 … you can go on these sites and replicate exactly what you would do if you were betting real money.”

According to a spokesperson from DraftKings, they said DraftKings was not affiliated with these sites in any way, and they do not promote underage wagering. The state of New Jersey’s legal gambling age is 21.

Also included in the Senator’s bill was legislation that would allow individuals who voluntarily opted-in on the state’s banned gamers list to lodge civil suits against any casinos that allow them to wager irresponsibly. This section of the bill was partially in response to a ruling in January that found NJ casinos to have no obligation to exclude problem gamblers. Senator McKeon wants to change that, he stated, “Nobody enjoys that kind of immunity anywhere. There’s even a sliver of a way to get the gun manufacturers now. But meanwhile, if you’re a casino, you can take advantage of somebody you know you can take advantage of with no recourse.” 

What do you think about Senator McKeon’s proposal? Should NJ tax rates increase for online gaming and sports wagering? Let us know in the comments below!