New Jersey Approves Increases to Sports Betting, iGaming, DFS Tax Rates

• New Jersey Senate and Assembly members approved a bill to increase tax rates for sports betting, iGaming, and daily fantasy sports
• Lawmakers reportedly agreed to the increases last week
• Gov. Phil Murphy (D) is expected to sign the bill into law

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As expected, New Jersey lawmakers will be increasing the state’s sports betting and iGaming tax rates.

However, daily fantasy sports operators will also be paying a newly increased tax rate in the Garden State as well.

The New Jersey Senate and Assembly both approved a bill today to increase the Garden State’s sports betting, iGaming, and daily fantasy sports tax rate to 19.75%.

Unsurprising Rate Increases

The increases to the New Jersey sports betting and iGaming tax rates were not surprising. Sports Betting Dime reported last week that Senate and Assembly leaders agreed to increase the rates to 19.75%, bargained down from a proposed 25% rate from Gov. Phil Murphy (D).

However, what was surprising was an included increase to the Garden State’s daily fantasy sports tax rate. The games are currently taxed at a rate of 10.5%, and will be bumped up to 19.75% if the bill is signed into law by Gov. Murphy.

It’s a nearly 100% increase for operators.

The Assembly approved the official bill, A5803, by a 45-33 vote. The legislation was then sent to the Senate, where it was approved by a 25-14 vote.

New Jersey currently taxes iGaming and online sports betting at a rate of 15% and 13% of adjusted revenues, respectively. The Garden State consistently reports one of the stronger gaming markets in the country, and interest in increasing the gaming tax rates has certainly existed at the legislative level.

An industry source in New Jersey told Sports Betting Dime that through discussions with Senate and Assembly leadership, there was little support for increases to 25%, but enough interest where increases in one or both markets could be expected.

Several States Increasing Sports Betting Rates in 2025

New Jersey will likely be the fourth state to increase its sports betting rate in 2025.

Maryland Gov. Wes Moore (D) recently signed a bill into law to increase the state’s sports betting tax rate to 20%, up from 15%. However, Moore’s version of the budget he introduced in January included an ever larger increase to Maryland’s sports betting tax rate. Moore originally proposed an increase to 32% for the state’s rate.

Lawmakers settled on a 20% compromise.

Illinois lawmakers included a last minute plan in the fiscal year budget to charge a $0.25 fee on the first 20,000,000 online sports bets taken in the state each year. The fee will increase to $0.50 per bet for every single bet taken after the initial 20,000,000 bets.

Gov. J.B. Pritzker (D) signed the state’s budget, and new sports betting fees, into law last week. The new fees will go into effect on July 1, 2025.

Additionally, Louisiana Gov. Jeff Landry (R) signed Rep. Neil Riser’s (R-20) bill, HB 639, into law last week. The legislation will officially raise the Pelican State’s online sports betting tax rate from 15% to 21.5% and creates a new fund for D-1 universities.

The new Louisiana tax rate will go into effect on Aug. 1.