New Jersey legislators are at odds over a new proposed gambling tax hike, with most fearing it may hinder the success of the gambling industry. Governor Phil Murphy pitched the tax hike last month, with only one other legislator agreeing that it was the best way forward for the state. Almost all of the lawmakers in New Jersey are opposed to any tax hikes in the sector except Democratic Senator John McKeon, who spoke in favour of the new levy.
Online Gambling In New Jersey
New Jersey’s online gambling industry has gone from strength to strength. The state is one of only seven states in the US to legalize gambling, having altered its laws in 2013. This includes online casino gambling, sports wagering, and the state lottery. New Jersey gambling laws are amongst the most progressive in the US, and the gambling market continues to thrive because of this. January 2025 hit a record-breaking month for the state, with revenue reaching $553 million.
Online gambling has grown significantly in popularity worldwide, fueled by technological advancements, increased internet penetration, and changing consumer preferences. Platforms like Samba Slots, for example, offer a vibrant world of casino games, integrating Brazilian motifs and energy into every interaction of the game. The platform offers both classic and newer slot titles, live dealer experiences, and an extensive sportsbook. Users across New Jersey turn to platforms like this to enjoy everything that online gambling has to offer, ultimately supporting a growing and innovative industry within New Jersey.
With January’s iGaming revenue figures up 6% from December 2024, the industry looks like it will only continue to grow. Tax revenue for online gaming in New Jersey is taxed at 15%, which is higher than the 7% for land-based casinos. Online gaming is currently contributing to almost half of the gambling tax revenue in the state.
Land-Based Gambling in New Jersey
New Jersey is renowned for being a hub for brick-and-mortar casinos, including the well-known destination of Atlantic City. The entire gambling revenue of New Jersey topped $6.3 billion in 2024, and land-based casinos played a pivotal role in this. This was a 9% increase in revenue year-on-year for the state.
In 2024 alone, land-based casinos generated $2.8 billion. This was generated through over $2 billion in slot machine games and over $700 million in table-based games. This was up 1% year on year. This would have generated a tax revenue for the state of $197 million at a 7% tax rate.
However, online gaming revenue in 2024 was up an incredible 24%, generating an astounding $2.39 billion in revenue. This huge increase in revenue and tax base could be another reason for the renewed push to increase taxes for online gambling. Even though land-based casinos generated more revenue in 2024, online gambling contributed significantly more in taxes to New Jersey. An increase to 25% could see online gambling’s tax contribution, potentially surpassing its land-based counterparts.
In 2024, sports wagering was up almost 9% year to year to almost $1.1 billion. This is not surprising as sports is a huge part of New Jersey and Philadelphia culture. With many bars and venues across both states offering festivities and entertainment for the recent Super Bowl game. With sports betting legal in both states, New Jersey set a record this year for sports wagering against the Super Bowl.
Residents of New Jersey wagering on this year’s Super Bowl totalled $168.7 million. This landed a profit for sportsbooks of nearly $25.2 million and was a 19% increase in wagering in comparison to the previous year.
New Jersey Proposed Tax Hike
With the increase in revenue and wagering in both land-based and online casinos in New Jersey, it is no wonder that lawmakers are starting to discuss tax hikes. The proposal, which was initiated by Gov. Murphy, seeks to increase the tax rate of online betting and online casino gambling by 25%. If approved, this would be just under double the tax rate for these platforms, which is currently at 15%.
Senator John McKeon spoke in favor of the proposed legislation. The senator has been working for over a year to push an increase in the gambling tax rates. McKeon proposed bill S3064 in 2024. This legislation called for a tax hike of 30% from 15% for online casino gambling. An increase was also called for the sports betting tax rate, which was also proposed to grow to 30% from the current rate of 13%.
McKeon’s proposal did not get any traction, which left all gambling taxes at their current rate. Now, Gov. Murphy seeks to look at this again with lower hikes in the hope that it will gain support. However, McKeon is currently the only senator to support his proposal. McKeon is committed to championing tax hikes in the state and supporting the new legislation. Recognising the huge revenue-generating potential that the industry has and the fact that the sector is poised to grow rapidly over the coming years.
Lawmakers Debate the Legislation
Senator McKeon believes that raising taxes for the sector is a good way to boost the state’s financial stability, especially during turbulent times for local economies. He also hopes that an increase in taxes could fund more support and resources for excessive gambling in New Jersey.
McKeon does not believe that online gambling and sports betting operators have paid their fair share in taxes. He argues that the state’s taxes are low in comparison to neighbours New York and Pennsylvania.
However, the bill proposed by Gov. Murphy has not received a positive reaction from other lawmakers in the state. With almost all of the other legislators disapproving of any tax hikes for the sector. Senator John Burzichelli spoke highly of New Jersey’s history and success as a hub of gambling entertainment. Especially since the legalization of online gambling and sports betting. He fears that any increase in taxes may put the state’s reputation at stake or put unnecessary risks in the sector.
Burzichelli worries that the progress that has been made since the encryption of the first casino could be undone with tax increases. An increase in taxes, he argued, could also risk investment into the state’s gambling industry or put local jobs at risk. Ultimately, all of this could affect the revenue that New Jersey already makes on gambling.
Conclusion
An increase in taxes for any area of the gambling industry in New Jersey does not look imminent. With legislators firmly against any risk that it may pose to the success of the New Jersey gambling industry. The sector has gone from strength to strength since the 1970s, with New Jersey becoming a trailblazer across the US for innovation in its gambling industry. Gov. Murphy’s bill may end up a thing of the past, like Senator McKeon’s; however, both sides of the argument have put across fair points to try and boost revenue for the state, protect players, and stimulate and support a growing and innovative industry in New Jersey.