A New Jersey senator has proposed a significant tax hike for online gambling operators, unveiling a bill that would nearly double the current tax rates for digital gaming platforms in the state.
State Senator John McKeon, representing Essex/Passaic, introduced the bill, which is aimed at increasing tax rates on both New Jersey’s online casinos and sportsbooks to 30%. This move comes amidst growing discussions around revenue generation and taxation within the state’s gambling industry.
McKeon serves as the vice chair of the Senate State Government, Wagering, Tourism & Historic Preservation Committee. The bill, identified as S3064, seemingly lacks an explanation for the proposed tax increase. The move is likely to face opposition from the state’s gambling industry, drawing lobbying efforts from Atlantic City’s casinos.
Currently, online casino revenue in New Jersey faces a base tax rate of 15%, with an additional 2.5% directed towards the Casino Reinvestment Development Authority, resulting in an effective total rate of 17.5%. Meanwhile, online sports betting is subjected to a 13% base tax rate, with an additional 1.25% for an effective rate of 14.25%.
Since the launch of online casinos in New Jersey in November 2013, the state has accumulated over $1.36 billion in taxes. Similarly, since the introduction of mobile sports betting in the summer of 2018, New Jersey has collected over $438 million in taxes, excluding the additional rates mentioned earlier.
If passed, McKeon’s bill would align New Jersey’s online gambling revenue tax rates more closely with those of neighboring states. For instance, Pennsylvania imposes a 16% tax on online table games, 54% on online slots and 36% on internet sports wagering. Meanwhile, New York taxes online sports betting at 51% of gross revenue. A 30.5% rate for online casinos in NY has been proposed, but this vertical has not been legalized yet.