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In a move that has brought relief to many, New Jersey lawmakers have unveiled a budget proposal for the 2025 fiscal year to the betting news media that maintains the current tax rates on online betting.
Unlike some states that have opted to increase taxes on betting operators, New Jersey has decided to keep things steady. This decision, while welcomed by many in the industry, has also sparked some controversy.
No Increase in Betting Taxes
New Jersey’s decision to keep betting taxes unchanged comes as a significant relief for operators.
The online gaming industry, still reeling from recent tax hikes in other states like Illinois, can breathe a little easier knowing their tax burden in New Jersey will not increase. Senator John McKeon had previously introduced a bill aiming to raise the state’s online casino tax rate from 15% to 30% and the online sports betting tax rate from 13% to 30%, but it didn’t make it into this budget cycle.
Despite his disappointment, McKeon acknowledges that economic forecasts may necessitate future changes to the tax rates. As a result, New Jersey’s decision offers a reprieve to operators who feared a heavier tax load similar to those implemented in other states.
A Model for Other States
New Jersey has long been a pioneer in the online gambling space. It was the first state to launch a competitive online casino market in 2013 and led the legal challenge to overturn the Professional and Amateur Sports Protection Act (PASPA) in 2018. This move catalyzed the sports betting regulation boom across the United States and it is what allows us to have the possibility of betting online in many states…
During the pandemic, New Jersey’s online casino market thrived when many states saw their gambling tax revenues plummet. This resilience has made it a model for other states looking to implement or expand online gaming.
Tax increases can significantly impact operators and the local economies they support. To illustrate this point, Meadowlands Racetrack owner Jeff Gural highlighted that a proposed tax increase in New Jersey would hurt sportsbook and track business.The revenue from sports betting helps offset losses from horse racing, and a higher tax rate could threaten the viability of both industries.
The debate over betting taxes often centers on balancing the need for state revenue with the sustainability of local gaming establishments. Opponents of tax hikes argue that higher rates can reduce revenue at brick-and-mortar casinos and racetracks, potentially leading to closures and job losses.
Crucially, finding a balanced approach that supports both the industry and state revenue needs will be key to New Jersey’s continued leadership in the online gaming space.
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