- New Jersey Gov. Phil Murphy (D) proposed a sports betting and iGaming tax rate increase in latest budget
- Murphy is looking to increase both rates to 25%
- iGaming is currently taxed at a rate of 15%, while sports betting is taxed at 13%
New Jersey Gov. Phil Murphy (D) is the latest governor to propose an increase in gaming tax rates to raise revenues in his state budget.
Murphy today presented a record-setting $58.05 billion budget, his last as New Jersey’s governor. The budget includes a tax rate increase to 25% of adjusted revenues for both New Jersey online sports betting and iGaming.
The state currently taxes iGaming and online sports betting at a rate of 15% and 13% of adjusted revenues, respectively.
Millions More in Annual Revenue
The $58.05 billion budget includes a proposed surplus of $6.3 billion.
“Our budget proposal for the next fiscal year reflects our ongoing—and unrelenting—commitment to building a New Jersey that is stronger, fairer, and more prepared for the future,” Gov. Murphy said in a budget release. “Over the past seven plus years, we have made historic progress in advancing this mission, but we’re not done yet. And over the next year, our absolute top priority—as it has been since day one—is delivering economic security and opportunity to every New Jerseyan.”
The increased tax rates for online sports betting and iGaming are estimated to bring in an additional $402.4 million in revenue for FY 2026.
According to the state’s budget briefing, revenues from online sports betting and iGaming remain strong in FY 2025. The revised forecast of $642.2 million for the year is $23.6 million above the originally certified level,
Election Year May Increase Pushback to Taxes
A New Jersey industry insider with knowledge of the situation spoke with Sports Betting Dime today after Murphy’s proposal and stressed that this is just the beginning of the budgetary process. The state’s fiscal year does not end until June 30 and the tax increases will likely receive pushback from state legislators.
The insider noted that New Jersey is currently in an election year and the governor’s budget includes nearly a billion in new taxes, which includes increases to liquor, cannabis, and tobacco rates.
The New Jersey legislature may be wary of approving a budget with so many new taxes and tax rate increases during an election year for both the governor and New Jersey General Assembly.
Ohio, Maryland Governors Both Float Tax Increases
Murphy joins Ohio Gov. Mike DeWine (R) and Maryland Gov. Wes Moore (D) as the latest to submit a sports betting tax rate proposal for their respective states.
In early February, DeWine presented his two-year budget plan, which included an increase to the state’s sports betting tax rate from 20% to 40%.
Ohio lawmakers previously agreed to increase the state tax rate from 10% to 20% in 2023, just several months after launching sports betting.
The sports betting tax rate increase plan will bring in an additional $130 million to $180 million in revenues per year, DeWine said.
Moore released a budget plan in early January that addressed the state’s $3 billion deficit. Moore explained a plan to reduce government spending by $2 billion and place a higher income tax rate on residents who make more than $500,000 and $1 million a year.
Included in his plan is a hike on Maryland’s 15% sports betting tax rate to 30%, a 100% increase. Moore also proposed an increase to state casino table games, bumping the rate from 20% to 25%.
New Jersey Governor Phil Murphy has recently proposed an increase in taxes on sports betting and iGaming in the state. The proposed tax hike comes as the state looks to generate more revenue from these rapidly growing industries.
Under the governor’s proposal, the tax rate on sports betting would increase from 8.5% to 10.5%, while the tax rate on iGaming would increase from 15% to 25%. The governor argues that these tax increases are necessary to help fund important programs and services in the state, such as education and healthcare.
Supporters of the tax hike point to the success of sports betting and iGaming in New Jersey, which have both seen significant growth in recent years. According to the New Jersey Division of Gaming Enforcement, sports betting revenue in the state reached $6 billion in 2020, while iGaming revenue topped $970 million.
Opponents of the tax hike argue that increasing taxes on sports betting and iGaming could drive customers away to neighboring states with lower tax rates. They also point out that the higher taxes could hurt smaller operators in the industry who may struggle to absorb the increased costs.
It remains to be seen whether Governor Murphy’s proposal will be approved by the state legislature. If the tax hike is implemented, it could have a significant impact on the sports betting and iGaming industries in New Jersey. Supporters believe that the increased revenue generated from the tax hike will benefit the state as a whole, while opponents fear that it could have negative consequences for businesses and consumers.
