New Jersey Considering iGaming Tax Rate Increase

New Jersey currently taxes iGaming at one of the lowest rates in the country. One Garden State Senator is hoping to change that this year.

Sen. John F. McKeon (D-27) officially introduced bill S3064 last week, which would effectively double both New Jersey’s iGaming and sports betting tax rates to 30% of gross gaming revenue.

The state’s iGaming rate currently sits at 15%, tied for the lowest online gaming tax rate in the country with West Virginia.

Keeping Up With the Joneses

If McKeon’s bill is approved, it would jumpstart New Jersey to the top of the iGaming tax rate lists in the country. New Jersey’s current rate of 15% is the lowest in the country, along with West Virginia. A 30% iGaming tax rate would jump New Jersey ahead of West Virginia, Pennsylvania table game rate of 16%, Connecticut’s current rate of 18% (increasing to 20% in 2026), and Michigan’s rate of 20% to 28% depending on revenue thresholds.

Pennsylvania, however, has a separate iGaming slot tax rate, which currently sits at 54%.

Its proposed increase to 30% for sports betting would place the Garden State firmly in the top-three of taxed states. New York’s sports betting rate of 51% is the highest rate in the country while Pennsylvania’s rate of 36% is the second highest. Delaware, New Hampshire, and Rhode Island also have rates higher than Pennsylvania, but they have limited markets with only one or two operators.

New Jersey lawmakers will have several months to potentially iron out the details of the proposed bill if they so choose. The state’s legislative session will officially adjourn on December 31.

Millions More in Potential iGaming Revenues

By potentially doubling its iGaming and sports betting tax rates, New Jersey could see millions more in tax revenue each year.

In 2023, New Jersey brought in $288.48 million in iGaming tax revenue under its current 15% tax rate. If the rate had been 30%, the state would have taken in nearly $577 million in tax revenue for the year.

For sports betting, the Garden State brought in $125.57 million in online sports betting tax revenue at a 13% tax rate. If the rate had been 30%, the state would have taken in $289.8 million in tax revenue for the year.