New Jersey Governor Phil Murphy’s proposal to nearly double the tax on mobile sports betting and iGaming to 25% has already sparked resistance. While the Democratic-controlled legislature might be inclined to approve the increase, opposition from both political and industry stakeholders is quickly gaining traction.
Bipartisan Lawmakers Push Back
Less than 24 hours after Murphy’s announcement, resistance began taking shape. South Jersey lawmakers—Democratic state Sen. John Burzichelli and Republican state Sen. Michael Testa, Jr.—issued a firm joint statement against the proposal.
“Doubling the tax on online sports betting and iGaming is putting a New Jersey success story at significant risk,” they said, warning of potential job losses, decreased industry investment, and harm to state revenue growth.
Their swift response suggests a brewing fight in Trenton, where lawmakers will have to weigh the state’s financial needs against the economic health of a gambling sector that has thrived under the current tax structure.
Industry Voices Raise Alarm
The gambling industry, unsurprisingly, isn’t staying quiet. Operators and analysts argue that such a steep tax hike could have unintended consequences.
- Higher taxes might force sportsbooks and iGaming platforms to scale back promotions, making New Jersey a less attractive market.
- Some companies may reconsider expansion or investment in the state.
- Increased costs could be passed on to consumers, potentially pushing bettors to unregulated offshore options.
New Jersey has been a leader in legalized sports betting since the Supreme Court struck down PASPA in 2018, and many see this move as a potential setback.
The Numbers at Stake
New Jersey currently taxes online sports betting revenue at 13% and iGaming at 15%. The proposed 25% rate would align more closely with states like New York, which taxes mobile sports betting at 51%. However, critics argue that comparing New Jersey to its northern neighbor is flawed due to major market differences.
Here’s how New Jersey’s current rates stack up against other key states:
| State | Online Sports Betting Tax | iGaming Tax |
|---|---|---|
| New Jersey | 13% | 15% |
| New York | 51% | N/A |
| Pennsylvania | 36% | 54% |
| Michigan | 8.4% | 20-28% |
While New York’s model generates significant revenue, operators there have struggled with profitability. Pennsylvania’s high tax rates have also led to a more limited promotional environment. Murphy’s proposal, opponents argue, could make New Jersey less competitive.
Political Battle Lines Forming
Despite the early resistance, Murphy’s proposal has some political momentum. Democratic leadership in the legislature has historically aligned with the governor on revenue-boosting measures, especially for budget priorities like education and infrastructure.
Yet, opposition from within Murphy’s own party—especially from lawmakers representing Atlantic City and South Jersey—could make passage more complicated. The gaming industry wields considerable influence, and if major casino operators or sportsbook brands push back hard, lawmakers might rethink their stance.
One thing is certain: this debate is far from settled. Expect intense lobbying, public statements, and possibly amendments before any final decision is made.
