Report: Gov. Murphy, N.J. State Leaders Agree to Sports Betting, iGaming Tax Increases

• According to a report from nj.com, the state will increase both the sports betting and iGaming tax rates in its next budget
• State leaders and Gov. Phil Murphy (D) agreed to an increase for both to less than a 20% rate
• A source tells Sports Betting Dime that both rates will be increased to 19.75%

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New Jersey will likely be increasing both its sports betting and iGaming tax rates, but not to the originally proposed level by Gov. Phil Murphy (D).

According to a report from nj.com, Gov. Murphy and state leaders have agreed to increase both the iGaming and sports betting tax rates to less than 20%, smaller than the originally proposed increase to 25%, in the next state budget.

An industry source confirmed the report from nj.com, but also revealed to Sports Betting Dime that both rates will likely be increased to 19.75%.

Sports Betting, iGaming Rates Topping Out at 20%

The nj.com report confirms an earlier story from Sports Betting Dime in which an industry source revealed state leaders had little appetite to increase both tax rates to 25%.

A finalized budget must be sent to Gov. Murphy by June 30.

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.

However, 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.

Much of the decision rested on New Jersey’s primary election for governor. With Democratic U.S. Rep. Mikie Sherrill‘s primary victory – and now the odds on favorite to be the next governor of the state – the source noted that there are now two likely outcomes for a potential increase:

• An increase to 18% of adjusted revenues for both sports betting and iGaming tax rates
• No increase to the sports betting tax rate, but an increase to 20% for iGaming

NJ.com’s report suggests that both will be increased, so they will likely end up at an 18% rate.

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.