New Jersey Lawmakers Approve Gambling Tax Increases
New Jersey lawmakers have approved significant increases to the state's online gambling tax rates following votes in both legislative chambers on Monday. An initiative to ban sweepstakes casinos in the state is also advancing to the last step.
LISTEN TO THIS ARTICLE:The Senate and Assembly each passed legislation to raise the tax on mobile sports betting from 13% to 19.75%, while iGaming tax rates will rise from 15% to the same 19.75% level. The bill also includes a sharp increase in the tax on daily fantasy sports, where the operating fee has nearly doubled from 10.5% to 19.75%.
Related: New Jersey Sportsbooks Urge Players to Fight Gambling Tax IncreaseGov. Phil Murphy is expected to sign the legislation into law, possibly as soon as today, having agreed to a compromise from his original proposal that sought a 25% rate for both mobile sports betting and iGaming. Once signed, the measure will take effect immediately and impact all licensed operators within the state's regulated gambling sector.
While the Senate vote proceeded largely along party lines, with a 25-14 result in favor, the measure faced more resistance in the Assembly. Although Democrats maintain a 52-28 majority in the lower chamber, the bill passed with a narrower 45-33 margin. The vote came on the final legislative day before lawmakers begin their scheduled two-month summer recess.
The tax changes align New Jersey with several other states that have recently taken similar action. States such as Louisiana and Illinois have also raised gambling-related taxes in the past few months. The developments reflect a growing trend among state governments seeking to bolster revenues from rapidly expanding online gambling markets, even as concerns persist regarding problem gambling and underage access.
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Sweepstakes Ban Closer to Implementation
Lawmakers also addressed a broader national issue during Monday's session, approving a ban on online casino-style sweepstakes that offer cash prizes. The Assembly passed the measure by a vote of 69-10 with one abstention, while the Senate followed with a 34-5 vote, also with one abstention.
This move makes New Jersey the sixth state in 2024 to enact such legislation. The bill, introduced by Assemblyman Clinton Calabrese as A5447, was backed by both the state Attorney General's Office and the Sports Betting Alliance. It was later substituted in the Senate for companion bill S4282 and passed without debate.
The legislation now awaits the decision of Gov. Murphy. Meanwhile, the Social and Promotional Games Association has urged the governor to veto the bill, expressing concern about its impact on legal sweepstakes operations. Despite this opposition, there appears to be strong bipartisan support for the crackdown on sweepstakes gambling, which has drawn scrutiny in multiple states in recent months.
Daily fantasy sports operators are also facing pressure beyond New Jersey. In California, Attorney General Rob Bonta is widely anticipated to release an opinion declaring several forms of DFS illegal under state law. Such a ruling could significantly impact the industry, especially if other jurisdictions follow suit. Industry stakeholders are reportedly mobilizing lobbyists in an effort to prevent a wider regulatory pushback that could stem from the expected California decision.
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