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New Jersey Online Casinos, Mobile Sportsbooks Push Back on Tax Increases

Online casinos and mobile sportsbook operators in New Jersey are resisting Gov. Phil Murphy’s (D) proposal for the state to receive a larger share of their income. 

In his fiscal year 2026 budget speech on Tuesday, Murphy suggested increasing the state tax on iGaming earnings from 15% to 25% and elevating the online sports betting tax from 13% to 25%. Murphy requires additional tax revenue to support his $58.1 billion budget, which marks the highest amount ever in New Jersey's history. 

Soon after Murphy announced his desire for increased online gaming funds for the state, Assemblywoman Rosy Bagolie (D-Essex) along with Sens. John McKeon (D-Essex), Shirley Turner (D-Mercer), and Joseph Vitale (D-Middlesex) introduced matching bills in their chambers to satisfy the governor. 

Assembly Bill 5349 and Senate Bill 5349 would both increase the state tax on gross gaming revenue generated from iGaming and online sports betting. Nonetheless, the law advances with a suggested uniform tax rate of 30%. 

Gaming Companies React 

The Casino Association of New Jersey, along with the iGaming and online sportsbooks it represents, has expressed its disapproval of Murphy and the Democratic lawmakers' introduction of bills aimed at increasing taxes on iGaming and internet sports earnings. 

Certain operators, such as FanDuel, directly contact their customers in the Garden State urging them to “Take Action” against the tax initiatives. 

“We need your help,” FanDuel messaged its New Jersey players. “New Jersey just announced a tax hike on online betting — both sports and iGaming. If approved, it would result in a nearly 100% tax increase! With massive, unfair hikes like this, everyone loses.”

FanDuel and BetMGM, in a comparable communication, provided links to a Sports Betting Alliance site where users can enter their details and promptly send a message against New Jersey legislators.

"A 100% tax hike means fewer promos, worse odds, and a less enjoyable market for consumers like me,” the prewritten letter reads. “If legal operators can’t compete, more bettors will turn back to illegal sites that offer better deals but lack protections. This tax hike doesn’t just hurt businesses — it directly impacts me and other responsible bettors.”

The Sports Betting Alliance advocates for lawful, regulated iGaming and sports wagering throughout the United States. The four participants are BetMGM, DraftKings, FanDuel, and Fanatics. 

New Jersey's existing tax framework for iGaming and online sports betting is viewed as appealing to operators, since the rates are below those of other legal iGaming states like Delaware, Michigan, Pennsylvania, and Rhode Island. 

iGaming Surpasses Atlantic City in January 2025 

The nine casinos in Atlantic City noted a decrease in live gaming activity last year. Gross gaming revenue from the physical gaming venues fell by more than 1% to $2.81 billion. 

In the meantime, iGaming platforms experienced a GGR increase of over 24%, reaching $2.38 billion. Bookmakers earned over $1 billion from gamblers, with the majority of the activity conducted online. 

The year 2025 started with iGaming GGR surpassing the winnings of Atlantic City casinos. Certain analysts think that iGaming operators will surpass physical venues by 2025, although there may be exceptions during the warmer summer months.