Are Big Online Gambling Tax Hikes Coming in NJ?

Across the nation, states are starting to feel pressure created by budget deficits. These deficits are being pushed to the brink by economic concerns and attempts to keep undocumented migrants in the fold until final determinations can be made regarding their plights.

Facing a $1.2 billion deficit for the fiscal year 2025-2026, New Jersey Governor Phil Murphy is proposing a series of new taxes to cover the shortfall. Among those new taxes are double-digit increases in the tax rates charged on iGaming and online sports betting revenue. He is proposing a new rate of 25% across the board, representing a 10% increase in iGaming gross revenue and 12% in online sports betting revenue.

While mum has been the word to date, the Governor's proposal has finally reached the online gambling community. Of course, online gambling operators are deeply concerned, stating that higher tax rates could lead to lower odds for online gamblers.

According to a comment made by  Resorts CEO Mark Giannantonio, head of the Casino Association of New Jersey:

“I don’t think the idea is going to go anywhere — and I hope that it won’t.” He later added, "It would be counterproductive, and cause more of that business to go offshore."

He is likely correct in that assertion, given that astute sports bettors will always drift to the online betting operators offering the best odds. Even BetMGM piped in by sending emails to customers, urging them to contact their local Congressmen in protest of the hikes.

How the Effects Will Be Felt Across the State

The new New Jersey budget needs to be approved and ready for implementation by July 1, 2025. That doesn't leave a lot of time for debate.

Based on current projects, these new tax increases would bring in just over $400 million in tax revenue for the fiscal year. That would offset about a third of the proposed deficit.

It's noteworthy that a good portion of online gambling tax revenue is used for programs related to senior citizens and the disabled. That aside, residents in South NJ have not been critical of recent proposed tax increases. That's likely because they benefit from the retail operations in Atlantic City, leaving them somewhat opposed to online gambling.

According to State Sen. John Burzichelli, D-Gloucester, there doesn't seem to be a lot of support for these tax increases, at least on the Democrat side of the aisle. He feels that stress levels caused by economic concerns are leaving everyone in the state a bit leary about any kind of tax increases. It's going to be a hard sell at this time.

U.S. iGaming Revenue Smashes Prior Record

At a time when states are looking for tax revenue, the iGaming industry is flying high. For the month of March 2025, U.S. iGaming operators raked in $905.6 million. That's a magnificent increase of 26.2% over the previous record. The market was led once again by Pennsylvania, bringing in $291 million with Michigan and NJ coming in 2nd and 3rd.