New Jersey lawmakers appear primed to hike NJ sports betting rates, making it the third state this session to raise taxes on sportsbooks.
A recent report from NJ.com notes that Gov. Phil Murphy and lawmakers are finishing budget discussions, complete with an increase in the NJ sports betting and online casino tax rate. The hikes also include taxes on tobacco and luxury homes.
Lawmakers in Maryland and Louisiana increased their base tax rates this session, while Illinois legislators added a per-bet tax. In Colorado, promo deductions were eliminated.
The New Jersey legislative session runs until June 30.
NJ sports betting deal
Heading into the session, Murphy proposed increasing the sports betting tax rate to 25% from 13%. The proposed increase also took online casino tax rate from 15%.
Those two proposed increases were estimated to bring the state an additional $402.4 million to the state.
Early on, industry sources told LSR the 25% hike was unlikely to pass. A report from the Press of Atlantic City confirmed the new rate at 19.75%.
NJ tax hike effects
According to data from Truist, FanDuel would have paid an additional $67 million in taxes last fiscal year. That includes $29 million from online sports betting revenue and $38 million from online casino.
DraftKings would have sent another $56 million to the state; $20 million from sports betting and $36 million from online casino.
BetMGM’s increase would have been $27 million, while other challenges Caesars and Penn Entertainment would have been $18 million and $4 million, respectively.
US tax hikes
The Garden State joins Maryland and Louisiana in raising the base tax rates this legislative session. Maryland increased to 20% from 15%, while Louisiana went to 21.5% from 15%.
In Illinois, lawmakers added a 25 cent per bet tax on the first 20 million wagers, increasing to 50 cents for every bet after 20 million.
Ohio lawmakers denied Gov. Mike DeWine’s proposal to take taxes to 40% from 20%. DeWine increased the Buckeye State rate to 20% from 10%.
