NJ Senator Wants to Increase iGaming Tax Rate
A New Jersey senator has tabled a bill, S3064, that would significantly increase the state's cut from online casinos and sports betting. This proposal aims to raise the current tax rates, sitting at 17.4% and 14.25%, to a uniform 30%. Potentially, this could generate hundreds of millions more dollars for the state's treasury.
Senator John F. McKeon’s bill is still in its early stages. It hasn't been assigned to a committee yet and hasn't undergone a review by the relevant state office. Despite that, the potential financial gain for New Jersey is clear. Estimates suggest that with a 30% tax rate in place since online gambling became legal in 2013, the state could have collected close to a billion dollars more in taxes.
Related: New Jersey Starts 2024 with Record Gambling Revenue
LISTEN TO THIS ARTICLE:Proponents of the bill argue that the increase in tax rates is necessary to ensure that the state receives its fair share of revenue from online gambling activities. With the growing popularity of online casinos and sports betting platforms, there's a belief that these businesses can afford to contribute more to the state's coffers.
They point to the potential benefits of the increased revenue. The additional funds could be allocated to various state programs and initiatives, including education, healthcare, and infrastructure, which could ultimately benefit all residents of New Jersey.
It's worth noting that New Jersey has been a trailblazer in the realm of online gambling. Since legalizing online casinos in 2013, the state has seen significant growth in the industry, becoming one of the leading markets for online gambling in the US.
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Casinos Could Stand in the Way
Despite the potential benefits, the fate of S3064 remains uncertain and the influence of the casino industry in New Jersey politics shouldn't be underestimated. Atlantic City casinos have one of the most effective lobbying forces in Trenton, the state capital. Their opposition could effectively stall the bill's progress in whichever committee it lands in, potentially preventing it from reaching a vote.
While Atlantic City casinos do benefit to some extent from revenue sharing with online operations, this pales in comparison to their income from in-person gambling. A higher tax on online casinos could translate to a smaller share of the profits for them, likely prompting significant opposition.
Mark Giannantonio, president of the Casino Association of New Jersey, has already expressed the industry's disapproval. He stated that the association strongly opposes any proposed tax increase on online gambling. This strong stance suggests a well-coordinated lobbying effort on the horizon, which could significantly impact the bill's fate.
The bill will likely face rigorous debate and scrutiny as it makes its way through the legislative process. If Atlantic City's casinos can gather enough backing, the bill will definitely fizzle out.
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