New Jersey Budget Proposal Includes Major Sports Betting Tax Hike

The Garden State is looking to get a bigger cut of the sports betting industry.

New Jersey Governor Phil Murphy has proposed a 2026 budget that includes a tax hike for sports betting operators. If the budget is passed, online sportsbook rates will jump from 15% to 25%. Online casino tax rates would also increase, leading to an increase in cash for the state.

A bipartisan group of lawmakers has already come out against the hike, setting up a showdown in the state legislature.

Unique Market Makes Tax Hike Unlikely

Unlike many other states that have legalized sports betting, New Jersey has decades of experience with the industry. Atlantic City has long been the gambling capital of the East Coast, as visitors flocked to its seaside sportsbooks. This means many operators have deep ties to the state and account for a large part of its economy. 

This relationship with the gambling industry will make it difficult to garner support from the public and other lawmakers. While increasing the state’s tax revenue is appealing, many believe it is too risky to target an industry that is essential to the community.

2026 Election Could Influence Votes

One significant factor working against the proposed tax hike is the 2026 election. Several state legislatures will face challengers who will be looking to curry favor with the public. This will make it hard for proponents of the hike to get enough votes, and the proposal will likely be stripped from the budget without much of a fight.

While concerns over problem gambling are significant, the Governor and other New Jersey lawmakers will be less willing to push the issue. Without that argument, it will be hard to get the public to turn on an industry they consider to be a part of their community.

States Are Struggling to Raise their Tax Rates

New Jersey’s proposal is one of many to raise taxes on sports betting operators in the US. Many states have tried but have been unable to oppose the industry. Most failed due to concerns that an increase would create a worse market for bettors and voters. Without support from the public, lawmakers pushing through an increase could have devastating consequences for their careers. 

Ohio and Illinois are two states that have found ways to pass significant tax hikes. The former doubled its rate as part of the 2023 budget, while the latter adopted a unique tiered system.

If the New Jersey tax hike is removed from the budget, we could see the state follow the lead of Illinois.