Currently, online gambling and sports betting are taxed at 15% and 13% respectively.

Senate Bill 3064 was formally introduced on 8 April, after being filed last week. The bill was referred to the Senate State Government, Wagering, Tourism & Historic Preservation Committee.

If enacted the bill would amend Section 17 of P.L.2013, c.27 (C.5:12-95.19), which specifies the online gambling tax amount. It would also amend Section 7 of P.L.2018, c.33 (C.5:12A-16), which addresses sports wagering tax.

It would take effect on next 1 January that occurs after the date of enactment, as per the bill text.

New Jersey law requires that online casinos and sportsbooks be tethered to brick-and-mortar locations, including casinos and horse racetracks. There are currently 30 online casinos and 18 digital sportsbooks.

In general, sportsbook operators are most comfortable with a tax rate of 10% or less. A 30% tax on sports betting would move New Jersey from one of the most favourable places to do business to one of the least.

Of the nearly 40 US jurisdictions that offer legal online sports betting, nine have a tax rate of about 15%. Of those nine, three are states where the lottery is the regulator. Ohio Governor Mike DeWine last summer spearheaded a doubling of the tax rate on wagering there. This saw it raised from 10% to 20%.

New Jersey’s gambling industry has been the subject of much discussion in 2024 so far. In January, Senator Joseph Pennacchio re-introduced a bill to launch racetrack slots and limit advertising. The bill had been introduced several times dating back to 2014, and had failed to reach farther than the committee stage in 2020 and 2022.

New Jersey under the spotlight

Later that month, research from the National Economic Research Associates – commissioned by the Campaign for Fairer Gambling – revealed New Jersey’s igaming market to be “detrimental” for the state’s economy. This is in spite of its positive tax contributions, which the study said were “cancelled out” by the growing cost of gambling harm.

Conversely, New Jersey’s gambling revenue reached new heights in 2023, hitting $5.78bn – a new record. For January alone, numbers remained high with $559.1m in revenue, up 28.0% year-on-year.

February was a less favourable month for the state. Its regulator – the New Jersey Division of Gaming Enforcement (NJDGE) – announced that it would drop its legal challenge against Evolution, which dated back to 2021.

NJDGE decided not to pursue further legal action after conducted an investigation into claims that Evolution’s products had been made available in countries subject to US trade sanctions. Evolution had argued that the allegations were from an unidentified third party.

Last month, David Rebuck stepped down as director of NJDGE with immediate effect. Rebuck told iGB he believes New Jersey should be seen as the “platinum standard” of igaming.