New Jersey Increases iGaming Taxes to 19.75%
New Jersey has implemented a significant change in its iGaming tax policy, effective July 1, 2025. Governor Phil Murphy signed a new law increasing the tax rate for online casino gaming, online sports betting, and fantasy sports to 19.75%, up from the previous rates of 15%, 13%, and 10.5% respectively. This development is expected to raise nearly $250 million for the state, according to a report by West Orange, NJ Patch. The decision aligns with New Jersey's effort to boost state revenue amidst growing competition in the online gambling sector.
New Jersey has implemented a significant change in its iGaming tax policy, effective July 1, 2025.
📌 Key Takeaways
- Increase iGaming taxes to 19.75% by 2025
- Ban sweepstakes casinos effective August 15, 2025
- Generate $200 million annually from tax increase
New Jersey Bans Sweepstakes Casinos
In addition to the tax hike, New Jersey has also banned online sweepstakes casino operations. This legislation, encapsulated in Bill A5547, was passed by both the Assembly (69-10-1 vote) and the Senate (34-5 vote) before being signed into law by Governor Murphy on August 15, 2025, as reported by iGaming Business. The ban targets platforms using a dual-currency system, a hallmark of sweepstakes models, and is now enforced by the Division of Consumer Affairs and the Division of Gaming Enforcement. New Jersey joins five other states in curbing this gaming model, as noted by SNJ Today.
Impact on New Jersey's Gaming Revenue
The increased tax is projected to generate an additional $200 million annually for New Jersey's budget. In July alone, the total revenue for Atlantic City casinos and their online partners was nearly $250 million, marking a 27% increase from the previous year, according to NJ Spotlight News. This boost in revenue is attributed to the tax increase and a growing iGaming market. The revenue supports the Casino Revenue Fund, which finances various public services, including senior citizen programs.
Industry Reactions to New Tax and Ban
The tax increase and sweepstakes ban have drawn mixed reactions from industry stakeholders. According to Action Network, the President of the Sports Betting Alliance expressed concerns that the tax hike could be a 'wrong turn,' potentially disrupting the competitive edge of New Jersey's gaming market. Additionally, major operators such as BetMGM and FanDuel have voiced apprehensions about market disruptions due to the increased financial burden, as covered by SNJ Today.
Compliance and Enforcement Measures
The new tax and regulatory changes necessitate strict compliance from operators. The Division of Gaming Enforcement and the Division of Consumer Affairs are responsible for enforcing these regulations. Operators must adjust their financial strategies to accommodate the higher tax rates and ensure adherence to the ban on sweepstakes models. The legislation also includes measures to tighten penalties around sports wagering misconduct, such as insider betting and 'bearding,' with potential criminal charges for violations exceeding $75,000, according to iGaming Business.
Future Implications for New Jersey's iGaming Market
Looking ahead, New Jersey's regulatory updates are expected to reshape its iGaming landscape significantly. The state aims to leverage these changes to enhance consumer protection and ensure sustainable revenue growth. However, the increased tax burden may prompt some operators to reconsider their market strategies or pass costs onto consumers. As the gaming industry continues to evolve, stakeholders must navigate these new regulations to maintain compliance and competitiveness. The ongoing developments highlight the need for adaptive strategies in a rapidly changing regulatory environment, as noted by industry analysts.
