Report: Higher Online Casino, Sports Betting Tax Rates Coming To NJ
Online casino and sports betting operators will likely be sending a larger chunk of their profits to the New Jersey government each month.
According to an NJ.com report, the tax rate for both online sports betting and online casino operators is increasing to around 20% in Gov. Phil Murphy‘s budget. The new rate, which Truist expects to be 19.75%, is a decent jump on current rates but could still be seen as a win by some operators as the original budget called for a 25% tax rate.
New Jersey was a pioneer for both iGaming and sports betting, with each market among the most mature in the country. The state launched online casino in November 2013 while the first online sports bet was accepted in August 2018.
Current online casino, sports betting tax rates
Despite being one of the earliest adopters of each for of gambling, New Jersey’s tax rates on both segment are some of the most business friendly in the country.
Online sports betting is taxed at 13%, a bit higher than the 8.5% tax rate for retail sports betting. A 19.75% tax rate represents a nearly 52% increase from the current online betting rate.
Online casino, meanwhile, would see a 31.7% increase from its 15% tax rate.
Truist: increased tax rate is manageable
All things considered, New Jersey’s increase is manageable for operators and could be mitigated through cutting promotional spending alone, Barry Jonas of Truist said in a note Monday evening.
“We also think mitigation can be done via promo reductions alone, with a 50% mitigation in 2026 very reasonable and potentially higher afterwards,” Jonas said. “While U.S. digital estimates need to come down again for recent state tax increases, we think [long-term] company targets are still achievable.”
Based on the last 12 months of results through May 2025, Jonas estimates the increase would cost FanDuel parent Flutter an additional $35 million and DraftKings an additional $30 million in taxes before any mitigation efforts. Both figures amount to around 3% of US EBITDA estimates at each of the company’s respective guidance midpoints.
Jonas also outlined what three other companies would have paid additionally had the increased taxes been implemented on the past 12 months of results:
