BetMGM and FanDuel are asking New Jersey bettors to take action following a new proposed tax hike for online gambling revenue by Gov. Phil Murphy. It was only a matter of time before an uproar would ensue over Murphy’s new tax proposal for sports betting platforms.
In Murphy’s Summary of Budget Recommendations for FY2026 he suggests both verticals be taxed at a 25% rate. Currently, online casinos sit at a 15% rate while sports betting is at 13%.
FanDuel is the market leader in both categories. Each alerted players that a tax increase of that magnitude can impact the gambling experience. A New Jersey customer got the following email from BetMGM:
“Why does it matter? A tax hike will have a MAJOR impact on your favorite online games, putting promotional offers and the best odds at risk.”
To prevent a potential tax increase, BetMGM and FanDuel want customers to voice their opinion. The operators provide a button that says “Take Action,” which sends a personal message New Jersey lawmakers in Trenton.
NJ gambling customers can send lawmakers a letter to protest
BetMGM and FanDuel are partnering with the Sports Betting Alliance (SBA) to make players’ voices heard. The “Take Action” button would bring a customer to an SBA page that already has a pre-written letter for the NJ legislature.
An excerpt of the letter mentions potential changes to the gambling experience for customers. It reads:
“Doubling the tax could force operators to cut back, costing us jobs and economic growth while driving more bettors to illegal sites that don’t contribute to our state. Plus, it will make my experience worse – less promos and worse odds will make the illegal market look more attractive.”
Promotions are a huge part of the online casino industry. Mentioning a potential larger draw to illegal markets, which could be more enticing for players, makes sense.
In addition to cutting back on jobs and economic growth, operators might not be able to offer certain games with a higher return to player (RTP) rates. Not being able to offer popular titles would impact the betting experience.
Tax hike appeared inevitable in New Jersey
The Garden State had been eying a tax increase for nearly a year. State Sen. John McKeon (D-Essex/aic), introduced a bill to increase the tax rates last March that would have raised rates to 30%.
Ultimately, it didn’t in time for the FY2025 budget. However, McKeon told PlayUSA last June that adjustments were coming:
“I’m disappointed that we didn’t get it done in time to be helpful this budget cycle. But there’s no doubt with the forecast for economic times in front of us that, ultimately, we will make some changes to the online gaming tax rate in our state.”
Gov. Murphy didn’t go as high as McKeon’s, but it is still nearly a 100% increase. The proposed tax rate would generate nearly a combined $725 million in additional revenue from both verticals.
