Operators, associations and senators all critical of online sports betting tax increase in New Jersey
New Jersey’s online sports betting tax is going up to 19.75 per cent, not as much as the envisaged 25 per cent, with the governor and state legislature signing a budget deal that includes an overall $1.2bn in new taxes.
Tax on online gaming revenue will increase to 20 per cent up from 15 per cent with sports betting tax increasing from 13 per cent with the increase going to the Casino Revenue Fund, which funds programs for senior citizens and residents with disabilities.
New Jersey Governor Phil Murphy said: “We want to be competitive. We want to be fair to our taxpayers, and we want to be fair to those who participate in the industry. We’re proud of the progress that we’ve made since we established ourselves back in 2018, and we want to further that progress. We want to do it in a way that works, that’s balanced for the participants, that works for the state and works for our taxpayers.”
Mark Giannantonio, President of the Casino Association of New Jersey, criticised the move, warning: “A tax hike in this difficult economy would threaten these benefits and negatively impact the operations, workforce and marketing of our casino hotel properties. Reductions in these benefits will also lead to reductions in consumer spending in the casino properties and other Atlantic City businesses.”
“Further, as evidenced in other jurisdictions, this type of tax hike will not yield such expected tax dollars to the State Treasury because it will result in diminishing returns through a consumer shift away from the licensed and regulated providers and back to the unregulated and illegal, offshore online businesses from which the state derives no revenue.”
Jeremy Kudon, President of the Sports Betting Alliance (SBA), said: “This tax increase would be a wrong turn for New Jersey. Since New Jersey first launched regulated sports betting seven years ago, sports betting operators have created thousands of jobs and generated hundreds of millions in revenue for New Jersey.
“Raising sports betting taxes will make sports betting more expensive for customers, slow operator investments in jobs and local business partnerships and put the regulated industry at a disadvantage to unregulated and offshore operators who pay no state taxes.”
Jeff Ifrah, Co-Founder of the iDevelopment and Economic Association, an online gambling trade association, said: “New Jersey’s legal online gaming and sports betting industry has been a national success story, generating billions in economic activity, supporting thousands of jobs, enacting regulation that protects consumers, and delivering significant tax revenue for the state. It is baffling why the governor would seek to undermine this by imposing even more taxes on an industry that is already exceeding its economic promise.”
Not all senators agreed with the move either. State Senators John Buzichelli (D) and Mike Testa (R) said: “Doubling the tax on online sports betting and iGaming is putting a New Jersey success story at significant risk.”
FanDuel, who has recently added a player tax to compensate for increases in Illinois, said: “A tax hike will have a major impact on your favorite online games, putting promotional offers and the best odds at risk.”
