A tax hike on online sports betting and mobile casinos is coming to New Jersey, but it’ll likely be less than Gov. Phil Murphy originally wanted.
Key takeaways
- The tentative budget agreement calls for a sports betting and iGaming tax increase, but below 20%.
- The deadline to finalize the $58.1 million budget is less than a week away.
- New Jersey would join several other states that increased the tax rate on gaming operators this year.
New Jersey’s legislative leaders reached a tentative deal with Murphy on the new fiscal year’s state budget, NJ Advanced Media reported Tuesday. While the exact percentage is still being finalized, the agreement calls for gaming operators to pay out more of their revenue to the state, but the rate will be less than 20%.
Currently, online sports betting operators are taxed at 13%, while it’s 15% for iGaming companies. Murphy said earlier this year he wanted to raise the gaming tax rate to 25%.
The deadline to finalize and send the $58.1 million state budget to Murphy is June 30. The new fiscal year begins July 1.
The plan
Murphy proposed raising an additional $402 million with his 25% tax hike. The increased funding is set to address a $1.5 billion deficit and help fuel the Casino Revenue Fund, which finances senior citizens and individuals with disabilities programs.
The increased rate received opposition from sports betting and casino operators. Some state legislators were also reportedly against the tax hike, or at least the percentage Murphy desired. New Jersey is also raising taxes on cigarettes and mansions.
According to the report, Democratic leaders hope to iron out the figures and present a finalized budget Wednesday before voting it out of committee that same day. The plan calls for a final legislative vote by Friday, which an NJ Advance Media source described as “ambitious.”
Joining a crowd
New Jersey joins a growing list of states looking to milk more out of gaming operators this year.
Similar to the Garden State, Maryland Gov. Wes Moore wanted to increase the sports betting tax rate to 30%. However, lawmakers settled on raising it from 15% to 20% in the final Budget Reconciliation bill, which Moore signed in late May.
Louisiana recently passed a law that increases the sports betting tax from 15% to 21.5%. Illinois lawmakers and governor agreed to impose a 25-cent charge per wager on operators’ first 20 million bets, with a 50-cent increase after 20 million, beginning July 1.
North Carolina lawmakers are split on a tax hike. The Senate proposed a state budget that doubled the rate on online sports betting operators from 18% to 36%. However, the House didn’t include a sports betting tax increase in its $66 million budget.
