While there is plenty of opposition to Gov. Phil Murphy’s proposal to raise NJ sports betting taxes, at least one lawmaker sees the positives.
Sen. John McKeon said last week he supports Murphy’s tax increase included in a recent budget proposal. The budget nearly doubles both the tax rate for NJ sports betting and online casino gambling from 13% and 15%, respectively, to 25%.
“The issue of raising these tax rates has been something I have championed for over a year now, so I commend the governor for recognizing the revenue-generating potential of these rapidly growing industries for our state,” McKeon said in a statement.
NJ sports betting tax higher under his bill
McKeon introduced a bill last year to raise the gambling tax rates to 30%. The bill has not moved.
“Online gambling and sports betting companies have not paid their fair share in taxes,” he said. “The current rates in New Jersey are comparatively low when looking at competitors in nearby states.”
If passed through with the budget, the hikes would contribute approximately $402.4 million to the $58 billion budget. The budget projects a $6.3 billion surplus.
Opposition mounts
While McKeon voiced support for Murphy, two senators came out against the proposal.
“Simply put, doubling the tax on online sports betting and iGaming is putting a New Jersey success story at significant risk,” Sen. John Burzichelli and Sen. Michael Testa said in a statement.
The Casino Association of New Jersey also issued a statement opposing the hikes, saying they “would threaten the stability of Atlantic City’s gaming and tourism industry.”
An industry source in NJ told LSR last week that they do not believe there is an appetite for doubling the tax rate in the legislature. Instead, they expect it to remain at the current level, perhaps with a slight increase.
Tax rates a big discussion point
Last year, Illinois Gov. JB Pritzker took Illinois’ sports betting tax rate from 15% to a tiered system up to 40%.
That came a year after Ohio Gov. Mike DeWine hiked the Buckeye State’s rate from 10% to 20%. DeWine has again proposed doubling the tax rate this year to 40%.
Maryland Gov. Wes Moore also proposed doubling the tax rate from 15% to 30% in his latest budget.
