Senator John McKeon is the sponsor of S3064, a bill that would raise the tax imposed on online casino and mobile sports betting operators in New Jersey.
Upping the Ante
As it stands, New Jersey imposes a tax of 13% on mobile sports betting revenues while iGaming or online casino operators pay 15% on revenues with an additional 2.5% earmarked for the Casino Reinvestment Development Authority.
However, if this bill does pass, both mobile sports betting and online casino operators will pay 30% to the state, which would double the tax revenue flowing into the Garden State’s coffers.
Senator McKeon stated that New Jersey’s current tax rates are “just not commensurate with where everybody else is, and we can use the revenues.”
“This is pure profit, the majority of which is deriving from online betting, sports betting in particular,” said McKeon.
Comparatively speaking, McKeon is correct in that neighboring New York imposes a whopping 51% on its mobile sports betting operators’ revenue while Pennsylvania checks levies a 36% tax on their platform providers.
Safeguards for Players
One other aspect of McKeon’s bill would be to allow those who have put themselves on a voluntary exclusion list to be able to sue casinos that allow them to gamble because of reckless indifference or intentional malfeasance.
“Nobody enjoys that kind of immunity anywhere. There’s even a sliver of a way to get the gun manufacturers now,” McKeon said. “But meanwhile, if you’re a casino, you can take advantage of somebody you know you can take advantage of with no recourse.”
New Jersey Needs Money
New Jersey is desperate for additional revenues as Governor Murphy’s spending plan has within it a $2.5 billion structural deficit that has prompted the governor to implement a 2.5% tax increase on businesses that generate more than $10 million in profits. Murphy has stated this is a temporary tax “until NJ Transit ultimately gets back on its feet again, and I have no doubt in my mind that it will,” he said.
That hike alone is expected to deliver $818 million annually, with most of the money going to New Jersey Transit for upgrades and repairs. There is also expected to be a 15% fare hike that will also contribute additional revenue to the state.
Murphy’s term will end in 2026 and he mentioned that, in conjunction with the corporate tax hike he’s proposing to a panel hosted by the Volcker Alliance and Penn Institute for Urban Research.
“The one challenge that we have right now — and it’s conscious, but we have to make sure that when we walk out of here in a year-and-a-half-plus we’ve addressed it — and that is we are deliberately running a structural deficit,” Murphy told the Volcker panel.
Benefits for Citizens
Senator McKeon’s plan also goes after corporations and stays away from asking the electorate to take more money out of their pockets to fund the state government.
“I was, in part, looking as to areas that wouldn’t take money out of the pocket of hard-working New Jerseyans, but out of an industry that, this year alone, on online gaming has profited $1 billion,” McKeon said.
Not surprisingly, the gaming industry has already opposed McKeon’s bill. “The Casino Association of New Jersey strongly opposes any proposed tax increase for online gaming,” said Mark Giannantonio, the association’s president.
