After Gov. Phil Murphy reached a budget deal with legislators, gambling operators are going to pay higher taxes in New Jersey.
As part of the agreement, online casino and sports betting tax rates increased. Under the plan, the new tax rate for both online casinos and sportsbooks is 19.75%. However, the prior rate for online casinos was 15% and sports betting was 13%.
The governor originally proposed a 25% tax rate for both and estimated the increase would bring in an additional $402 million in tax revenue.
Murphy and state lawmakers compromised on the final rate. The hike in online gaming taxes is meant to help cover spending increases in the state’s record-setting $58.1 billion budget for fiscal year 2026.
The increase comes as the industry continues to grow in the Garden State. New Jersey operators reported gross revenues of $2.9 billion in 2024. In May, online gaming operators won $246.8 million, up 28.5% from $192.1 million last May.
Online Gambling Seems Is The Better Tax Revenue Source
In several recent months, online gaming revenue has exceeded that from live casinos. With online revenue outpacing brick-and-mortar, and with increased competition looming from new New York City casinos soon, New Jersey lawmakers New Jersey lawmakers have recently considered northern New Jersey to build casinos.
New Jersey is the latest state to start asking for more from its gambling operators.
In Louisiana, legislators approved increasing the sports betting tax rate from 15% to 21.5%. Gov. Jeff Landry signed the bill into law last week.
Illinois has enacted an increase on sports betting that includes a 25-cent fee per bet for an operator’s first 20 million bets, rising to 50 cents for each bet beyond that. DraftKings and FanDuel responded by tacking on a 50-cent transaction fee per bet for Illinois bettors. Maryland has also seen a sports betting hike from 15% to 20%.
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