New Jersey Online Casinos, Mobile Sportsbooks Push Back on Tax Increases

Posted on: February 27, 2025, 11:46h. 

Last updated on: February 27, 2025, 12:31h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Atlantic City casinos oppose iGaming and online sports betting tax increases
  • NJ Gov. Phil Murphy is seeking a larger cut of online gaming revenue
  • iGaming and online sports betting is thriving in New Jersey

New Jersey online casinos and mobile sportsbook operators are pushing back on Gov. Phil Murphy’s (D) motion for the state to take a bigger cut of their revenue.

New Jersey online casinos sports betting Atlantic City
Atlantic City casinos oppose state efforts to increase taxes on revenue generated online. New Jersey Gov. Phil Murphy has suggested a significant tax increase for iGaming and mobile sports betting. (Image: Shutterstock)

During his fiscal year 2026 budget address on Tuesday, Murphy proposed raising the state tax on iGaming revenue from 15% to 25% and increasing the online sports betting tax from 13% to 25%. Murphy needs more tax revenue to fund his $58.1 billion spending plan, a record high in New Jersey history.

Shortly after Murphy’s revelation that he wants more online gaming money allocated for the state, Assemblywoman Rosy Bagolie (D-Essex) and Sens. John McKeon (D-Essex), Shirley Turner (D-Mercer), and Joseph Vitale (D-Middlesex) filed identical legislation in their respective chambers to appease the governor.

Assembly Bill 5349 and Senate Bill 5349 would each raise the state tax on gross gaming revenue won via iGaming and online sports gambling. However, the legislation goes further with a proposed flat levy of 30%.

Gaming Firms Respond

The Casino Association of New Jersey and the iGaming and online sportsbooks it represents have responded with opposition to Murphy and the Democratic lawmakers’ filing of bills to raise taxes on iGaming and internet sports revenue.

Some operators, including FanDuel, reach out directly to its customers in the Garden State asking them to “Take Action” against the tax pushes.

“We need your help,” FanDuel messaged its New Jersey players. “New Jersey just announced a tax hike on online betting — both sports and iGaming. If approved, it would result in a nearly 100% tax increase! With massive, unfair hikes like this, everyone loses.”

FanDuel and BetMGM, through a similar message, included links to a Sports Betting Alliance webpage where users can input their information and immediately send a message in opposition to New Jersey lawmakers.

A 100% tax hike means fewer promos, worse odds, and a less enjoyable market for consumers like me,” the prewritten letter reads. “If legal operators can’t compete, more bettors will turn back to illegal sites that offer better deals but lack protections. This tax hike doesn’t just hurt businesses — it directly impacts me and other responsible bettors.”

The Sports Betting Alliance lobbies for legal, regulated iGaming and sports betting across the US. Its four members are BetMGM, DraftKings, FanDuel, and Fanatics.

New Jersey’s current tax structure for iGaming and online sports betting is considered attractive to operators, as the rates are lower than other legal iGaming states, including Delaware, Michigan, Pennsylvania, and Rhode Island.

iGaming Tops Atlantic City in January 2025

The nine casinos in Atlantic City reported a slowdown in in-person play last year. Gross gaming revenue at the physical gaming floors dropped over 1% to $2.81 billion.

Meanwhile, iGaming platforms saw GGR grow more than 24% to $2.38 billion. Oddsmakers won more than $1 billion from bettors, with most of the action facilitated online.

2025 began with iGaming GGR exceeding Atlantic City casino win. Some analysts believe iGaming operators will outpace brick-and-mortar throughout 2025, with likely exceptions coming in the warmer summer months.