A bill filed in the New Jersey state legislature proposes to more than double the operator tax rate on internet sports betting revenue to 30%.
State Sen. John McKeon’s bill, S 3064, would also double the internet casino operator tax to 30%. New Jersey is the pioneering state of American sports betting, with the Supreme Court ruling in favor of the state in the case that overturned the Professional and Amateur Sports Protection Act (PASPA) in May 2018 clearing the way for sports betting to expand in the U.S. beyond Nevada. The Garden State currently imposes an 8.5% tax on retail adjusted gross sports betting revenue and a 13% levy on AGR derived from sports betting apps.
McKeon’s bill continues a recent trend in which states have either increased their tax rates or made proposals to do so. Gov. Mike DeWine doubled the tax rate to 20% in Ohio last July, a move viewed as punitive in some circles because of the relentless barrage of advertising from sportsbooks on television and radio in the Buckeye State. Ohio collected $79.2 million in state taxes the first six months after the rate doubled compared to $57.6 million at the 10% rate from January through June 2023.
Gov. JB Pritzker proposed more than doubling the tax rate in Illinois to 35% in his “State of the State” address last month as part of his $52.7 billion budget for Fiscal Year 2025. His budget proposal estimates $200 million in additional tax revenue in raising the rate from its current 15%. Illinois operators generated $1 billion in AGR in 2023, resulting in $150.3 million worth of state taxes.