Tax turnaround in online gambling causes resistance
New Jersey is facing a far-reaching tax reform that is causing heated debates, especially in the area of online gambling. As part of his budget for 2026, Governor Phil Murphy has proposed increasing the tax increase in New Jersey for online betting and iGaming providers from the current 13 to 15% to 25%.
This measure is intended to generate additional revenue. According to estimates, this could bring around 400 million US dollars into the state coffers. However, not only the gambling industry, but also numerous economic sectors and interest groups are reacting critically to the move.
The planned tax hike immediately caused a stir among online gambling operators. Industry giants such as FanDuel, DraftKings and BetMGM, which serve the majority of the New Jersey market, see the increase as a threat to their competitiveness and future profitability.
FanDuel has already sent out an email to its customers asking them to oppose the proposal and send personal messages to lawmakers. The Sports Betting Alliance, which includes other major players in addition to these companies, has also provided a template on its website that citizens can use to contact their representatives.
Resistance from the industry and economy
The main criticism is that the higher taxes could lead to significant increases in operating costs. If the increase from 13-15% to 25% is implemented, operators would either have to reduce their profit margins or pass these costs on to consumers. Experts fear that this could be felt in the form of worse odds, reduced bonus offers and a smaller range of games. There are also concerns that higher prices could reduce the incentive for players and encourage them to switch to unregulated, foreign offers, thereby losing potential tax revenue to the state.
Surprisingly, support is also coming from unexpected quarters: Some land-based casinos in New Jersey are relying on cooperation with online providers to ensure that they retain their licenses. Since the online platforms are often tied to stationary establishments, these operators also fear that a drastic increase in taxes could lead to a competitive disadvantage. The picture is therefore complex, with both digital and traditional gaming companies fighting for the survival of a successful industry.
Another tax increase in New Jersey
Murphy is planning tax increases not only in online gambling, but also in other areas. His budget proposal increases taxes on addictive substances such as alcohol, tobacco and cannabis. He is also making the sale of drones, weapons and real estate more expensive. With this broad-based reform, he wants to raise an additional three-digit million amount and use it to finance pension payments and reduce property taxes, among other things.
The legislators now have several months to debate the controversial plans. A final decision is expected by the end of June. The coming months will show whether the broad opposition from business and the gambling industry can prevail against the tax increase or whether Murphy will stick to his reform course. The discussion about this tax turnaround will not only shape the future of online gambling in New Jersey, but will also have far-reaching effects on other sectors.
