Murphy’s Proposed Tax Hike on Online Gambling Faces Backlash

New Jersey’s gambling industry and political allies are preparing for a fight against Gov. Phil Murphy’s proposed tax increases on internet gambling and sports betting, the state’s most rapidly expanding gaming sectors.

The Democratic governor’s budget plan, unveiled Tuesday, calls for raising the tax rate on both forms of gambling to 25%. Online sports betting, currently taxed at 13%, and internet gambling, which sits at 15%, would see significant increases under this proposal.

Murphy’s istration estimates the higher rates would generate $402.4 million in additional revenue. While this represents a relatively small fraction of the state’s $58 billion budget, it specifically targets the most profitable areas of New Jersey’s gaming industry.

Industry Leaders Oppose the Tax Increase

The proposal has been met with immediate opposition from casinos, online betting companies, and their advocates. Bill Pascrell III, a gambling industry lobbyist representing multiple Atlantic City casinos, as well as the Meadowlands Racetrack and Monmouth Park, strongly criticized the plan.

“This is a terrible idea,” Pascrell stated. “We are going to run a very strong lobbying and public education campaign against this.”

The Casino Association of New Jersey also issued a statement condemning the tax hike, warning it could harm the state’s gaming and tourism sectors, along with the thousands of workers who depend on them.

“These are very challenging times for the Atlantic City casino industry and its employees,” the association said. “Tourism is down and visitation has decreased at our brick-and-mortar casinos. This unnecessary tax proposal, against the backdrop of a weakened economic climate, would jeopardize our properties and ultimately hurt the working-class people it s.”

The group further urged lawmakers to reject any legislation that would discourage investment in Atlantic City’s ongoing transformation into a premier beachfront resort destination.

Potential Economic Consequences

Industry leaders argue that the tax hike could have far-reaching economic repercussions. Jeremy Kudon, president of the Sports Betting Alliance—whose include FanDuel, DraftKings, BetMGM, and Fanatics Sportsbook—called the proposal “a wrong turn for New Jersey.”

“Increasing taxes on internet casino games and sports betting will jeopardize thousands of jobs and hundreds of millions of dollars in revenue the industries have generated in New Jersey,” Kudon warned. “Any effort to increase sports betting taxes on New Jerseyans threatens all of that progress.”

Casinos and sportsbooks do not retain all revenue generated from online gambling and sports betting, as winnings must be shared with external operators and technology providers. Meanwhile, brick-and-mortar casinos in Atlantic City are experiencing a decline in revenue from in-person gamblers, with six of the nine casinos earning less than they did prior to the COVID-19 pandemic.

Lawmakers and Analysts Weigh In

The proposed tax increase is also facing bipartisan resistance. Democratic Sen. John Burzichelli and Republican Sen. Michael Testa both expressed concerns about the impact on New Jersey’s gaming sector.

“Increasing the tax to 25% is putting a New Jersey success story at significant risk,” they said in a t statement. “A tax increase would negatively impact jobs, industry investment, and our New Jersey customers, and it could affect future revenue growth for the state.”

Sen. Vince Polistina (R-Atlantic) suggested that instead of raising taxes, the state should implement the 5% across-the-board tax cuts Murphy had proposed late last year.

“Lower taxes on Atlantic City gaming operations has resulted in significant investment,” Polistina said. “Given the challenges in Atlantic City and with New York gaming on the horizon, I believe the tax rates on all gaming operations should remain the same so that we don’t jeopardize potential investment in the City.”

Industry analysts warn that the increased tax burden could ultimately be ed on to consumers. A report from Jefferies Equity Research projected that the tax hike could cost The report also estimated that Entain, a co-owner of BetMGM, could see a $62 million reduction in revenue.

Since the legalization of internet gambling in 2013 and sports betting in 2018, the industry has contributed significantly to New Jersey’s economy, generating thousands of jobs. Pascrell pointed to ongoing investments in gaming infrastructure, including live-dealer studios and data centers, and questioned whether companies would continue expanding in the state if the tax increase is implemented.

“We’re talking about further studios for live-dealer games, and data centers for the industry,” he said. “You think companies are going to want to invest in New Jersey now?”

Source:

‘’Casinos, online betting firms plan fight against New Jersey’s tax increase proposal’’, pressofatlanticcity.com, February 27, 2025.