New Jersey Lawmakers Agree on New 19.7% Gambling Tax

The agreed figure is lower than the 25% tax rate proposed by Governor Phil Murphy in his budget.

Ziv Chen

Last Updated: June 25, 2025 1:59 PM EDT • 3 minute read

New Jersey Lawmakers Agree on New 19.7% Gambling Tax — Pictured: NJ/NY Gotham FC forward Esther González acknowledges the crowd. Photo by John Jones via Imagn Images.

Lawmakers have agreed to increase the tax on New Jersey sports betting operators in the state, raising taxes from 13% to 19.75%. However, the agreed figure is lower than the 25% tax rate proposed by Governor Phil Murphy in his budget. The agreement will also see taxes on the New Jersey online casino market increase from 15% to 19.75%.

The gambling tax rise is just one element of Gov. Murphy’s budget, which lawmakers must pass by July 1.

When Gov. Murphy first proposed the 25% tax increase, the President of the Casino Association of New Jersey, Mark Giannantonio, criticized the measure.

“As evidenced in other jurisdictions, this type of tax hike will not yield such expected tax dollars to the state treasury because it will result in diminishing returns through a consumer shift away from the licensed and regulated providers and back to the unregulated and illegal, offshore online businesses from which the state derives no revenue,” he said.

Still lower than other states

While there may be some concerns about the rise in taxes in New Jersey, the proposed tax hike still keeps the rate far below that of many US states. Pennsylvania charges online sportsbooks a 36% tax, while a 54% tax applies to online slot games. Meanwhile, New York enforces a 51% tax on New York sports betting sites. Real money online casinos are not legal in NY.

These states have enforced these taxes for some time. However, other US states have recently decided to increase taxes and gone beyond the proposed changes in New Jersey.

The Illinois sports betting market is a prime example. In 2024, the state increased its sports betting tax to 40% from 15%. It went further in 2025 by adding a $0.25 tax to all bets, and a further $0.50 tax to all bets after the first 20 million a sportsbook accepts.

That decision has provoked significant reactions from sportsbook operators. FanDuel and DraftKings introduced surcharges of $0.50 on bets in Illinois to counter the tax changes. Meanwhile, DraftKings recently formed a political action committee (PAC) and highlighted the Illinois taxes as a key reason for its creation.

So, while some lawmakers may fear the NJ tax rise will drive away operators and not benefit the state much, sportsbooks face much stricter requirements in other US states.

Shakeup continues

A proposed tax hike isn’t the only change potentially coming to the New Jersey sports betting market. A New Jersey Senate committee recently approved a bill to ban player prop bets on college sports in the state. Senate Bill S-3080 still needs approval from the Senate, the House, and the governor before becoming law.

Still, it shows that even though New Jersey was the first state to launch an online sportsbook outside of Nevada, the market can still change.

Written by:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.