Lawmakers Approve Higher Tax for Online Betting in New Jersey

Gamblers, fantasy players, and sweepstakes fans in New Jersey could soon feel the impact of two new bills that just cleared the state legislature. Lawmakers have approved a tax increase on all major online wagering formats and are also pushing for stricter rules that could shut down certain types of games entirely.

Good to know

• Online casinos, sportsbooks, and fantasy operators will now be taxed at 19.75%.
• New bill targets sweepstakes platforms that use prize-style reward models.
• Proxy betting and account sharing could become criminal offenses.

Lawmakers approved a tax hike under Bill A5803, raising rates for online sports betting, casino games, and daily fantasy sports to 19.75%. Previously, those sectors paid different rates: 13% for sportsbooks, 15% for iGaming, and 10.5% for fantasy contests. The bill passed by slim margins—45–33 in the Assembly and 25–14 in the Senate.

Governor Phil Murphy had originally suggested a 25% flat tax, but after strong resistance from both online and in-person operators, legislators settled on a lower rate. The daily fantasy sports change, however, flew under the radar with little public attention.

Senator Paul Sarlo said, “We took a scalpel to some of the governor’s proposed revenue raisers,” referring to the negotiations that led to the compromise.

Another major piece of legislation—Bill A5447—was passed on the same day. This one aims to ban many sweepstakes-style gambling platforms, particularly those using virtual currencies or dual-currency models that let players redeem prizes. These sites have grown across the U.S. in recent years and often operate outside state regulations.

Violators of the new rules could face steep fines—up to $100,000 for a first offense and up to $250,000 for repeat violations. Critics argue these platforms pose risks due to their lack of oversight, while supporters say they offer legal, no-purchase-required entertainment.

The Social and Promotional Games Association pushed back hard. “Assembly Bill 5447 seeks to outlaw promotional sweepstakes platforms that are already legal, do not require purchase to play, and are enjoyed responsibly by millions of adults across the country,” it said, urging Governor Murphy to veto the bill.

A5447 would also target other betting-related offenses, like using insider information to place wagers or rigging the outcome of a sporting event. The bill also bans proxy betting and using someone else’s account, with added penalties if the value involved is $1,000 or more.

Both bills now head to the governor’s desk for final review. While Murphy originally pitched a higher tax, his position on the proposed sweepstakes ban remains unclear. All eyes are now on the statehouse to see if the legislation becomes law.

The post Lawmakers Approve Higher Tax for Online Betting in New Jersey appeared first on iGaming.org.