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A New Jersey lawmaker is proposing to increase the tax rate on both online gaming and online sports betting to 30 percent, bringing the state’s tax rates closer to those in neighboring Pennsylvania and New York.
Senator John McKeon, a Democrat, is listed as the bill’s sponsor, but as of Friday (March 22) there was no bill summary for S 3604 posted online, beyond the brief synopsis that reads: “Increases tax on internet casino gaming and internet sports wagering to 30 percent.”
McKeon is vice-chair of the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
The current effective tax rate for online sports betting in New Jersey is 14.25 percent, compared with 51 percent in New York and 36 percent in Pennsylvania. New Jersey taxes iGaming at 17.5 percent compared with 16 percent for table games and 54 percent for virtual slot games in Pennsylvania.
When lawmakers agreed last summer to extend New Jersey's online gaming market for a further five years to 2028, there were rumors that legislative leaders were considering whether to impose a tax increase on the lucrative market.
New Jersey is not the only gaming state where casino and sports-betting tax rates have become a political issue.
In Illinois, Democratic Governor J.B. Pritzker has proposed in his executive budget for fiscal year 2025 to raise the sports-betting tax rate from 15 percent to 35 percent. Ohio Republican Governor Mike DeWine also signed a budget bill last July that raised his state’s sports-betting tax rate from 10 to 20 percent.
Amid the inability of state lawmakers in Harrisburg to decide whether to regulate and tax skill-game devices or ban the machines outright, the gaming terminals will soon be prohibited in most Philadelphia businesses.
The Philadelphia City Council unanimously approved legislation on Thursday (March 21) to ban businesses from having the machines unless they also have a casino or liquor license. The business would also have an area for at least 30 people to eat or drink.
“It is not a perfect bill and we are open to continued conversations with people to make it a better bill,” councilmember Curtis Jones Jr. said following passage of the legislation.
“But what I will note is that in 2017 the door got opened for these machines to be dropped into our neighborhoods and we have been waiting for help from Harrisburg,” Jones said. “And I believe that by passing this bill it will incentivize our colleagues at the state level to finally take this on and do something on behalf of Philadelphia.”
Mike Barley, a spokesman with Pace-O-Matic, told City and State Pennsylvania the company was disappointed in the decision of the city council. He said the ban would “jeopardize the livelihoods of many local small businesses.”
A New jersey lawmaker wants to double online gambling taxes and Philadelphia moves to ban skill gaming machines from the city.
