New Jersey Raises Tax On Sports Betting, iGaming

New Jersey legislators and Gov. Phil Murphy have agreed to raise the tax on sports betting and online casinos.

According to nj.com, the agreement would boost the tax on gross gaming revenue to 19.75%. Sports betting is taxed at 13% and online casinos at 15%.

Online casinos, known as iGaming, allow participants to use a cellphone or computer anywhere in the state to play traditional casino games such as slots and craps for real money. New Jersey is one of only seven states that have legal iGaming laws. All seven are in a general geographic area from Michigan to Rhode Island, including two states that border New Jersey: Pennsylvania and Delaware.

In New Jersey, Murphy, a Democrat, pictured, had initially sought a “25% tax rate for sports betting and iGaming in his Fiscal Year 2026 budget proposal,” nj.com reported.

“The FY 2026 budget plan projects a record-setting $58.1 billion in spending,” the news site reported. “The increased tax rate on online casinos and sports betting was proposed to help offset some of the spending."

Sports betting is legal and live in 38 states and Washington, D.C. On Dec. 1, Missouri will become the 39th state with legal sports betting.

With this tax increase proposal, New Jersey will join Louisiana and Maryland in boosting the tax on sports betting this year. Louisiana’s goes from 15% to 21.5%, while Maryland’s goes from 15% to 20%. In Illinois, a per-wager tax of up to 50 cents will be placed on each sports bet in the state.