New Jersey Senate Receives Bill To Consider Online Gaming Tax Increase

The New Jersey Senate has ushered in a bill raising tax rates for online sports betting and casino operators, marking a significant development in the state's gambling landscape.

Proposed by Senator John McKeon, Bill S3064 seeks to elevate tax rates for both sports betting and online casino activities to 30%, a notable increase from the current rates.

• Currently, online sports betting operators face a 14.25% tax rate.
• iGaming operators are subject to a 15% tax plus an additional 2.5% contribution to the Casino Reinvestment Development Authority.
• The bill has now been formally presented to the Senate and awaits review by the Senate State Government, Wagering, Tourism and Historic Preservation Committee.

Regional Comparison and Revenue Impact

Among its neighboring states, New York and Pennsylvania already have some of the highest online gaming tax rates in the country, producing significantly greater revenues compared to New Jersey.

• New York imposes a 51% tax rate on operators, generating $1.73 billion in tax revenue from a $39.2 billion handle since January 2022.
• Pennsylvania enforces a 36% tax rate on similar operations.
• In contrast, New Jersey’s tax revenue stands at just $286.7 million from a $26.1 billion handle during the same period.

Had New Jersey implemented a 30% tax rate over that timeframe, total state revenue could have reached $609.7 million, substantially narrowing the gap with its neighboring states.

National Trends Toward Higher Betting Taxes

The push for higher gambling tax rates is not isolated to New Jersey — several other states are exploring similar measures.

• Illinois Governor JB Pritzker has proposed raising the state’s sports betting tax from 15% to 35%, aiming to bring in an additional $100 million for fiscal year 2025.
• In Ohio, Governor Mike DeWine recently signed legislation doubling the tax rate on sports betting operators from 10% to 20%.
• These moves reflect a nationwide trend toward tightening fiscal policies in sports wagering and online gambling regulation.

The debate over Bill S3064 underscores a growing challenge for states — balancing competitive market conditions with the need for greater public revenue. If passed, the bill could mark a new chapter in New Jersey’s leadership role within the U.S. gambling industry.