Unhappy Gamblers and Operators in New Jersey
Gambling platforms urge patrons to confront proposed New Jersey tax hike, aimed at nearly doubling current rates.
New Jersey's online gambling operators are furious about Governor Phil Murphy's suggestion to ramp up tax rates from 13-15% to a whopping 25%. This controversial proposal was announced on Tuesday, although the final decision won't be made until June 30.
Legislators assume this tax increase could generate an extra $402.4 million by 2026. Last year, online gambling taxes in the Garden State totaled $497 million.
In comparison, sportsbooks in New Jersey currently pay 13%, while iGaming operators foot a 15% bill. If the rate rose to 25% for both, it would still be lower than what operators pay in neighboring states like Pennsylvania (36%) and New York (51%).
Time to Raise Voices Against Tax Hike
The operators fear the proposed plan will make an already tough market even more competitive. The fallout for consumers could include less enticing odds, reduced casino game options, and fewer attractive promotions. This might drive customers to the black market.
FanDuel, a dominant force in the state, wasted no time in urging customers to oppose Governor Murphy's plan. FanDuel quickly emailed consumers, begging them to convey their disapproval to state lawmakers personally.
The Sports Betting Alliance, which counts BetMGM, FanDuel, and DraftKings among its members, provides a ready-made template for sending messages to NJ representatives on its website.
Will It Have the Desired Impact?
The Casino Association of New Jersey (CANJ) also opposes the proposed tax increase. The organization worries it could harm Atlantic City's tourism and gaming industry.
Mark Giannantonio, CANJ's president, acknowledged that the tax hike would bring in more money for the state. However, he argued that it would threaten the financial security of the casino sector and its employees, as consumers might spend less at casinos due to lower odds and limited game selections.
Giannantonio also questioned the effectiveness of similar tax hikes in other states, claiming they would only result in diminishing returns due to consumer shifts away from regulated providers. Illinois, for example, boosted its online sportsbook rate last year from 15% to potentially 40%. Lawmakers in Maryland, Indiana, Ohio, and Massachusetts are considering bills proposing similar changes.
- Gamblers and operators in New Jersey are displeased with Governor Phil Murphy's suggestion to lift online gambling taxes from 13-15% to 25%, a proposal that might generate an extra $402.4 million by 2026.
- Last year, New Jersey collected $497 million in online gambling taxes, with sportsbooks paying 13% and iGaming operators paying 15%.
- If the rates were to increase to 25% for both, it would still be lower than what operators pay in neighboring states like Pennsylvania and New York.
- Operators fear that this tax hike could make the already competitive market even tougher, potentially leading to less enticing odds, reduced casino game options, and fewer attractive promotions.
- FanDuel, one of the dominant forces in the state, is urging customers to oppose this plan and convey their disapproval to state lawmakers.
- The Casino Association of New Jersey also opposes the proposed tax increase, arguing it could harm tourism and the gaming industry in Atlantic City by threatening the financial security of the casino sector and its employees.
