The New Jersey Senate recently passed a significant bill that bans lottery gambling activities and significantly raises the tax rate for sports betting and online casino operators to 19.75%. This tax adjustment, up from the previous 13% (online gambling) and 15% (sports betting), is expected to have a profound impact on the market.
The bill was passed in both houses with 34 votes in favor, 5 against, and 1 abstention. It was first introduced in March this year, subsequently reviewed by the Assembly's Committee on Tourism, Gaming, and the Arts, as well as the Appropriations Committee, and was officially approved on June 30. The new regulation stipulates a complete ban on lottery gambling activities, and anyone using lotteries for illegal gambling will face penalties, with enforcement carried out by the Department of Consumer Affairs and the Division of Gaming Enforcement.
Despite strong opposition from the Social and Promotional Games Association (SPGA), which called the ban "reckless and shortsighted," the prohibition was ultimately implemented.
The tax increase was passed by the Senate with 25 votes in favor and 14 against, now unifying the tax rate for online gambling and mobile sports betting at 19.75%. Governor Phil Murphy plans to sign the bill, making it officially effective.
Market observers note that this move may force some operators to reassess their cost structures, particularly those with thin margins and high customer acquisition costs, posing a risk of contraction or market exit. The performance of operators such as Caesars Atlantic City, Ocean Casino, and Monmouth Park is a focal point of attention.
Furthermore, New Jersey's tax reform initiative echoes the additional tax levied on sports betting in Illinois passed in June, showing that several states in the US are intensifying gambling industry regulation and fiscal policy adjustments. Although the related impacts are still controversial, it clearly reflects that the gambling market is in a period of adjustment.
