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A New Jersey lawmaker has put forward a significant proposal to increase taxes on online gambling operators, unveiling a bill that would nearly double the current tax rates for digital gaming platforms operating within the state.
State Senator John McKeon, representing Essex/Passaic, introduced the bill with the aim of raising tax rates on both New Jersey's online casinos and sportsbooks to 30%. The move comes amidst ongoing discussions surrounding revenue generation and taxation within the state's gambling industry.
McKeon, who serves as the vice chair of the Senate State Government, Wagering, Tourism & Historic Preservation Committee, introduced the bill, identified as S3064. The proposed tax increase, however, appears to lack a detailed explanation. It is anticipated to face resistance from the state's gambling industry, potentially sparking lobbying efforts from Atlantic City’s casinos.
Presently, online casino revenue in New Jersey is subject to a base tax rate of 15%, with an additional 2.5% directed towards the Casino Reinvestment Development Authority, resulting in an effective total rate of 17.5%. Meanwhile, online sports betting incurs a 13% base tax rate, with an additional 1.25% for an effective rate of 14.25%.
Since the inception of online casinos in New Jersey in November 2013, the state has collected over $1.36 billion in taxes. Similarly, since the introduction of mobile sports betting in the summer of 2018, New Jersey has amassed over $438 million in taxes, not including the additional rates mentioned earlier.
If approved, McKeon's bill would bring New Jersey's online gambling revenue tax rates more in line with those of neighboring states. For example, Pennsylvania levies a 16% tax on online table games, 54% on online slots, and 36% on internet sports wagering.
Meanwhile, New York imposes a 51% tax on online sports betting revenue, with a proposed 30.5% rate for online casinos, although the latter vertical has yet to be legalized.
By fLEXI tEAM
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