Highlights
- NJ Gambling Tax Rate Set to Increase to 25% in 2026
- Many Gambling Operators are Heavily Opposed to the Plan
- BonusFinder Ran The Numbers to See How the Tax Rate Increase Will Affect Consumers
NJ Governor Murphy Proposes a Higher Gambling Tax Rate
The New Jersey online casino and sports betting industry faced a shocker when governor Phil Murphy presented the Fiscal Year 2026 Budget for New Jersey.
The budget called for an increase on both sports betting and online gambling tax rates. Sports betting tax rate in NJ would increase from 13% to 25% and online casino tax rate would increase from 15% to 25%.
Operators like BetMGM Casino are not happy with the plan and have been sending out emails to their New Jersey customers warning them that increasing the tax rate would put “promotional offers and the best odds at risk.”
As experts of online casino bonuses, we wanted to weigh in on the potential implications of the 25% tax rate for consumers. While increasing the tax rate will clearly have a negative impact on the profits of gambling operators – does it really matter for the average consumer?
Comparison with Other States
As of now, New Jersey comes in at tied lowest for the online casino tax rate, and already has the 2nd highest sports betting tax rate among iCasino states.
| State | iGaming Tax Rate | Sports Betting Tax Rate |
|---|---|---|
| Pennsylvania | 54% on online slots and 16% on online table games | 36% |
| Michigan | 20% on gross revenue less than $4 million, increasing to 28% for revenue over $12 million | 8.4% |
| New Jersey | 15% | 13% |
| West Virginia | 15% | 10% |
For sports betting states, NJ ranks among the lowest tax rates when looking at the biggest sports betting states by population.
| State | Sports Betting Tax Rate |
|---|---|
| New York | 51% |
| Pennsylvania | 36% |
| Tennessee | 20% |
| Maryland | 15% |
| Illinois | 15% |
| New Jersey | 15% |
| Ohio | 10% |
| Colorado | 10% |
| Indiana | 9.5% |
| Michigan | 8.4% |
A situation where the tax rate would increase to 25% for both sports betting and online casinos, would mean that NJ would become the third most heavily taxed state for online sports betting.
However, the situation wouldn’t change that much for online casino, at least compared to other states. Big operators like DraftKings Casino would still pay a higher tax in Michigan, and the 25% isn’t even close to the 54% on online slots that we see in Pennsylvania.
Potential Impact on Online Casino Bonuses
Both Michigan and NJ online casinos. Therefore, it would be safe to assume that the welcome bonuses would be less lucrative in these states.
However, if we look at all the large casino operators like DraftKings, BetMGM, and FanDuel, they all share the same welcome offer across the three biggest iCasino states. Clearly, new customer acquisition still trumps the effects of a higher tax rate.
Since Pennsylvania’s 54% tax on slots is not enough for operators to cut back on the welcome offers, we feel confident that the casino welcome offers will not significantly change in New Jersey – even if the fiscal budget is approved.
However, where we could see some impact are ongoing promotions:
Potential Impact on Customer Retention Offers and Ongoing Promotions
While BetMGM have been one of the most vocal opponents of the tax rate increase, even sending emails to existing customers, they, among other operators still generally run the same customer retention offers across all iGaming states.
BonusFinder has run the numbers, and according to our research, the tax rate hardly affects the ongoing casino promotions run by three large casino operators:
- BetMGM Casino: No Difference Between States Except for Team Specific Offers
- Caesars Palace Online Casino: No Difference Between States
- Golden Nugget Casino: No Differences Between States
Sportsbook Promos & Odds
While casino offers aren’t heavily affected by the tax rate, sportsbook offers have some differences. For example, New York has an extremely high tax rate of 51% on sports betting. Therefore, most operators don’t offer welcome bonuses on this state. Given that NJ would only push the tax rate to 25%, it’s hard to imagine that we would end up in a similar situation.
The 25% is still far lower than the 36% in Pennsylvania. Comparing those two states – there aren’t too many differences between the bonuses largest brands are offering. Therefore, as with casino bonuses – it’s hard to imagine that the situation would change for new customers.
Impact on Odds
Since we’ve seen that ongoing promotions are unlikely to be affected by the higher tax rate, this only leaves us with the question – will it impact the odds sports bettors will receive in New Jersey after the tax rate increase.
Once again, we looked at the difference between New Jersey and Pennsylvania. We ran through the numbers for one round of NBA and MLB games at DraftKings, BetMGM, and FanDuel.
The end result? There were no differences between the odds with New Jersey’s current 15% tax rate and the 36% tax rate in Pennsylvania. This suggests that the tax rate increase to 25% is unlikely to impact the odds for sports betting either.
Conclusion – How Will The Tax Rate Increase Impact Customers
Ultimately, based on our research, the tax rate increase is unlikely to impact new or existing customers. Online gambling operators are always looking for an edge against their competitors, and if one brand starts to offer worse bonuses or odds, it will lose any possible edge it has had.
The only scenario where we foresee a large impact on customers is if multiple operators decide to go down the route of offering worse bonuses at the same time, which leads to a cascading effect similar to New York. However, it’s a cutthroat business, and we find it incredibly difficult to believe that DraftKings and FanDuel for example would co-operate in such a way as they lock horns in the contest for the spot of the no1 gambling operator in America.
