New Jersey Gaming Taxes Could Increase Should Gov. Phil Murphy Get His Way

Posted on: February 25, 2025, 04:26h. 

Last updated on: February 25, 2025, 04:29h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • New Jersey iGaming and online sportsbook taxes could go up
  • Gov. Phil Murphy has proposed a record spending plan
  • New Jersey taxes iGaming and online sports betting less than Pennsylvania

New Jersey is home to one of the richest iGaming and sports betting markets in the United States. The state’s governor wants a bigger piece of the pie.

New Jersey online gaming sports betting
New Jersey Gov. Phil Murphy meets with the media at Woodbury City Junior/Senior High School on Feb. 19, 2025. Murphy is seeking to increase the state tax rate on iGaming and online sports betting to fund his record spending plan. (Image: NJ Governor’s Office)

On Tuesday, New Jersey Gov. Phil Murphy (D) unveiled his $58.1 billion expenditure plan, a record high, for the 2026 fiscal year. He thinks increasing the tax rate on online sportsbooks and internet casino operators could help fund a bit of the unprecedented spending.

Murphy wants to increase funding for property tax rebates and reproductive health care while paying down a $1.2 billion “structural deficit.”

He wants the state to receive more money from not only online gambling and sports wagering but also from alcohol, tobacco, and recreational cannabis sales. On adult-use marijuana, Murphy wants to jack up the state tax from $2.50 per ounce to $15 per ounce, while cigarette taxes would climb 30 cents per pack and taxes on booze sales would surge 30%.

The former Goldman Sachs executive who won reelection in November 2021 also suggests doubling the tax on property sales upwards of $1 million to 2%, and to 3% on property sales above $2 million.

New Jersey iGaming, Online Betting Taxes

Murphy informed the legislature that he wants them to pass legislation to increase the tax rate on iGaming and online sports wagering to 25%. Currently, gross gaming revenue (GGR) generated by online casinos direct 15% of their win to Trenton, while online sports wagering revenue is subjected to a 13% state tax.

New Jersey certainly isn’t known as a tax haven, as the state’s 10.75% state income tax is the fourth-highest in the nation behind only California (13.3%), Hawaii (11%), and New York (10.9%). But when it comes to online casino and sports gambling, New Jersey has been welcoming to operators in affording them a lower tax rate than in neighboring states with similar gaming, including Pennsylvania, which taxes internet slots at 54% and online sportsbooks at 36%.

Murphy’s administration believes the proposed online gaming tax rates would bring in an additional $402.4 million for the 2026 fiscal year.

Casino Industry Response 

The Casino Association of New Jersey, representing the nine casinos in Atlantic City in the Trenton capital, quickly opposed Murphy’s effort to increase online gaming and sports betting taxes.

This proposal is ill-advised and, if passed, will have significant adverse consequences for brick-and-mortar casinos. The partnerships between online gaming companies and Atlantic City casinos have established significant cross-marketing and promotions, such as complimentary rooms, entertainment, and promotional gaming credits for use at the properties to help bring more visitors to Atlantic City,” said Mark Giannantonio, CANJ and Resorts president. 

In 2024, iGaming GGR hit a record $2.38 billion. Oddsmakers kept more than $1 billion of the bets placed, also an all-time high. 

Meanwhile, Atlantic City casino revenue declined 1.1%, and fewer people stayed overnight last year.  

Through three quarters, the most recent report, the nine casinos counted 3.11 million occupied room nights. During the same nine months in 2023, the total number of occupied rooms was nearly 3.14 million nights. The average nightly rate also slipped slightly from $186 in 2023 to $183.