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New Jersey To Raise Sports Betting Taxes to 19.75%, Not 25%

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Publish Date: Jun 25, 2025

Fact checked by: Sara Jane Gamelli

New Jersey is raising internet gambling and sports betting taxes to 19.75% as opposed to the amount Governor Phil Murphy wanted, which was 25%. He sought that amount in his last budget proposal in February.

Currently, sports betting is taxed at a rate of 13%, and online gambling is taxed at 15%.

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According to The Press of Atlantic City, the deal was confirmed by five lawmakers. They sought anonymity because they weren't authorized to discuss budget negotiations publicly.

A budget must be passed by July 1.

"We want to be competitive," Murphy said. "We want to be fair to our taxpayers, and we want to be fair to those who participate in the industry."

He went on to mention that New Jersey's lawsuit helped clear the way for sports betting to become possible in 2018

"We're proud of the progress that we've made since we established ourselves back in 2018, and we want to further that progress," he said.

"We want to do it in a way that works, that's balanced for the participants, that works for the state and works for our taxpayers."

The Press of Atlantic City was unable to get a comment from the Casino Association of New Jersey

However, when 25% was proposed, president Mark Giannantonio said, "As evidenced in other jurisdictions, this type of tax hike will not yield such expected tax dollars to the state treasury because it will result in diminishing returns through a consumer shift away from the licensed and regulated providers and back to the unregulated and illegal, offshore online businesses from which the state derives no revenue."

Other States Are Changing Sports Betting Tax Amount

Nearby Pennsylvania taxes online sports betting at 36% and online slots at 54%. As for New York, sports betting is taxed at a rate of 51%.

The state of New Jersey brought in $138.3 million in tax revenue from sports betting. As for internet gambling, it generated $358.3 million in taxes.

The proposed 25% worked out to an estimated $402.4 million, but, of course, at 19.75%, it'll be lower.

Increasing online sports and gambling tax rates have become common recently

Maryland is increasing theirs from 15% to 20%. Massachusetts is considering a massive increase from 20% to 51%.

There's also Illinois, which is going to be implementing a tax on a per-wager basis, with the first 20 million bets taxed at $0.25 each and all after that at $0.50.

The tax rate was 15% flat before that.

In 2023, Ohio increased its rate from 10% to 20% and is considering doubling it again to 40%

There's also Louisiana, which is increasing from 15% to 21.5%, and North Carolina, which may rise to 36%.

Could Tax Increases Do More Harm Than Good?

Fitch Ratings, which is a financial analytical firm, said that these tax increases could harm the online betting industry.

“Recent and proposed state sports betting tax hikes could dampen the online gaming sector’s positive growth momentum,” Associate Director David Lowenstein wrote in a June 16 note to investors.

He said the higher charges could hurt the companies' earnings, potentially causing them to consider the same kind of customer-unfriendly surcharges that are coming in Illinois.

Furthermore, the iDevelopment and Economic Association has spoken out against the change in tax rate.

"New Jersey’s legal online gaming and sports betting industry has been a national success story, generating billions in economic activity, supporting thousands of jobs, enacting regulation that protects consumers, and delivering significant tax revenue for the state," Jeff Ifrah, its co-founder, said in a statement.

"It is baffling why the governor would seek to undermine this by imposing even more taxes on an industry that is already exceeding its economic promise."

As a result, Ifrah thinks customers may turn to the black market, thus generating no revenue for the state

The Sports Betting Alliance, an industry group featuring prominent brands like DraftKings, FanDuel, bet365, BetMGM, and Fanatics Sportsbook, has a letter for state lawmakers that customers can fill out to ask legislators not to pass the tax increase.

Also, DraftKings announced that it is forming a PAC to influence gambling legislation.

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