New Jersey Online Gaming Extension Slashed From Ten To Two Years

June 28, 2023
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New Jersey, the largest U.S. market for internet gaming, is on the verge of approving a massive reduction from ten to two years for the extension of legal and regulated online casino operations.

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New Jersey, the largest U.S. market for internet gaming, is on the verge of approving a massive reduction from ten to two years for the extension of legal and regulated online casino operations.

The New Jersey Assembly Budget Committee passed a bill on Tuesday (June 27) which would extend a sunset provision included in the original online gambling legislation in 2013.

However, an amendment to the bill would drastically cut the extension to two years instead of another ten years as originally proposed.

“There are amendments. Can I move the bill with amendments please?” Democrat Eliana Pintor Marin, the chair of the committee, said before the committee’s vote on Tuesday.

Marin, who voted for the bill, did not say what the amendments included, and after less than two minutes, the committee overwhelmingly passed the legislation without debate.

The bill now advances to the floor of the Assembly where a vote on the internet gambling extension is expected before a July 1 constitutional deadline to enact a balanced budget. Separate legislation, proposing a ten-year extension until 2033, is also eligible for a vote on the Senate floor.

The reason for the dramatic reduction in the internet gaming sunset provision can be traced to the Speaker of the New Jersey Assembly, Democrat Craig Coughlin, according to sources.

Coughlin is aggressively pushing a bill that would cut property taxes in half for senior citizens in New Jersey to persuade them not to move to states with lower tax rates.

To pay for the tax cut for seniors, legislators may seek to raise the state tax rate on internet gaming from the current rate of 15 percent, sources said.

Internet gaming has been hugely successful in New Jersey, producing more than $6.29bn (without including sports wagering) since the state launched online gaming in November 2013, according to the American Gaming Association, with New Jersey the world's third largest regulated online casino market last year.

Still, taxes on internet gaming in New Jersey are much lower compared to the 54 percent rate on online slot games in Pennsylvania or 51 percent tax rate on mobile sports wagering in neighboring New York, and there has been grumbling among lawmakers in the Garden State that the tax is not high enough.

“A two-year extension is not good news for the internet gambling industry,” said a New Jersey gaming lobbyist who requested anonymity.

“The people who are supporting this bill see [New Jersey Democratic Governor] Phil Murphy as a lame duck who is term limited and can be the fall guy for this tax hike,” the lobbyist said.

Murphy’s second four-year term expires in 2025.

If, for some reason, the internet gambling expansion extension is not passed before Saturday’s deadline, the issue may spill over into the legislature’s lame-duck session after elections in November.

“If that happens, all bets are off on an internet gambling extension,” the gaming lobbyist said.

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