NJ Online Gambling Tax Hike Reportedly A Done Deal As Sweepstakes Ban Gains Momentum
New Jersey will become the fourth state to raise online gambling taxes this year, following Illinois, Maryland and Louisiana.
According to reports from NJ.com and Press of Atlantic City, state lawmakers and Gov. Phil Murphy agreed to increase the New Jersey sports betting and online casino taxes to 19.75% from 13% and 15%, respectively.
The tax hike comes as the parties finalize budget discussions. The budget also includes tax increases on tobacco and luxury homes.
Murphy has until the end of the legislative session on June 30 to sign the budget. The rate hike will go into effect on July 1.
NJ tax hike will bring the state another $200-plus million
Murphy presented a tax increase to 25% for online casinos and sports betting in his Fiscal Year 2026 budget proposal in February. With the reported 19.75% tax rate, the state is expected to generate at least $200 million in the upcoming fiscal year.
According to data from Truist, the state would have received an additional $172 million from its top five operators last fiscal year across both verticals:
- FanDuel: $67 million
- DraftKings: $56 million
- BetMGM: $27 million
- Caesars: $18 million
- Penn Entertainment: $4 million
NJ online casinos are growing by double-digit percentages year over year and just reported a record $246.8 million in May revenue, a 28.5% yearly improvement. Based on that trajectory, the tax hike could bring the state an additional quarter of a billion dollars in FY 2026.
Sweepstakes bill passes Assembly committee
New Jersey’s Assembly Bill 5447, which looks to ban sweepstakes casinos in the Garden State, passed through the Assembly Appropriations Committee with unanimous support on June 19.
The bill now reaches the Assembly floor and will need to repeat the same process in the Senate if it passes. Given the limited time, the bill seems unlikely to pass before the legislative session adjourns at the end of the month.
Even if it doesn’t pass, the bill demonstrates New Jersey’s willingness to shut down sweepstakes casinos. That momentum will continue to grow, especially considering a ban’s potential positive effect on the state’s legal online casino industry.
Active 2025 sessions for gambling
In addition to Maryland and Louisiana’s increases, Illinois lawmakers added a per-wager tax on every bet its sportsbooks handle. Effective July 1, operators will pay 25 cents per bet for the first 20 million wagers they accept, and 50 cents for every bet thereafter.
A similar handle tax was proposed in Ohio, too. A bill to add a 2% tax on overall handle is currently in a Senate committee. The bill was introduced after Gov. Mike DeWine unsuccessfully attempted to double the state’s current 20% tax rate earlier this year.
Online casino discussions were also prominent in 2025. Lawmakers in at least 10 states introduced legislation, though several efforts died quickly or were pushed to 2026. An online casino bill in Maine reached Gov. Janet Mills’s desk, but a significant chance exists for her to veto it.
Lastly, sweepstakes casinos have taken significant heat in 2025. Five states passed legislation to ban them – Connecticut, Louisiana, Montana, Nevada and New York – though Louisiana Gov. Jeff Landry vetoed the bill.
California lawmakers introduced a similar bill this week with support from the state’s tribal casinos.
