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New Jersey officials are moving closer to increasing the tax rates on iGaming and sports betting. Discussions between Governor Phil Murphy and lawmakers point to higher rates being included in the upcoming state budget, expected to be finalized by June 30.
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Governor Murphy has pushed for a 25% tax rate on adjusted gaming revenues, but lawmakers appear to be settling on a lower figure. Current rates stand at 15% for iGaming and 13% for online sports betting. The new plan under discussion would likely increase both, with reports suggesting the final number could be around 19.75%.
The updated rates would generate an estimated $402.4 million in additional revenue for New Jersey, helping to fund state programs and balance the budget.
Should the tax hike reach the reported 19.75% rate, major operators like FanDuel and DraftKings would see a noticeable jump in their payments to regulators. FanDuel would have paid an additional $67 million in the previous fiscal year, while DraftKings’ tax bill would have increased by $56 million.
Even though final numbers are still under review, any increase would align New Jersey with other states that have already raised tax rates on sports betting.
New Jersey is not alone in considering new tax rates. Maryland increased its tax on sports betting to 20%, while Louisiana went further, raising its rate to 21.5%. Illinois opted for a different model, applying a tiered per-wager tax that starts at $0.25 for the first 20 million bets, increasing to $0.50 after that mark.
In response to the Illinois change, FanDuel and DraftKings announced a $0.50 transaction fee for every wager placed within the state to help cover the new costs.
Alongside the tax discussions, Senator Kristin Corrado’s proposal to ban proposition bets on college sports has gained momentum. Her bill passed through the State Government, Wagering, Tourism & Historic Preservation Committee on June 20. It aims to protect student-athletes and restrict certain types of betting that have raised concerns in recent years.