New Jersey Gov. Phil Murphy has plans to spend $58.1 billion this year and he wants to finance some of that by raising sports betting and iGaming taxes among other levies, reports iGB.
The proposal, which Murphy shared Feb. 25, is the latest gambling and sports betting tax increase proposed in the U.S. in the last year. It feels somewhat ironic, in that Murphy’s name is on the lawsuit that overturned the Professional and Amateur Sports Protection Act (PASPA) in 2018. Since then, 38 states have launched some form of sports betting (Missouri is also set to launch later this year), with two of those hiking their original sports betting tax rates.
Murphy proposes hiking both the sports betting and iGaming tax rates to 25 percent, up from 13 percent and 15 percent, respectively.
“This tax increase would be a wrong turn for New Jersey,” industry lobbyist Jeremy Kudon countered in a statement on behalf of the Sports Betting Alliance (SBA). “Since New Jersey first launched regulated sports betting seven years ago, sports betting operators have created thousands of jobs and generated hundreds of millions in revenue for New Jersey.
“Raising sports betting taxes will make sports betting more expensive for customers, slow operator investments in jobs and local business partnerships and put the regulated industry at a disadvantage to unregulated and offshore operators who pay no state taxes.”
BetMGM, DraftKings, Fanatics Sportsbook and FanDuel are SBA members.
The iDevelopment Economic Association (iDEA) echoed Kudon’s thoughts, with co-founder Jeff Ifrah calling on New Jersey and other states to focus their energies on unregulated and illegal markets.
“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,” Ifrah said in a statement.
“At the same time, competition is growing from unregulated alternatives, including CFTC-approved sports contracts that take bets from 18-year-olds, operate outside state laws and pay no state taxes.”
