They say that there are two things in life that you can bever avoid, death and taxes. And while President Trump’s Big Beautiful Bill seems set to cut the latter for many Americans, in New Jersey online casinos and sportsbooks are now going be hit by a bigger tax bill for providing their services.

That’s because the state’s Governor Phil Murphy beat the deadline of June 30th to secure an increase in the level of tax just in time to get it included in the next year’s budget. Back in February Governor Murphy caused no little amount of consternation amongst industry bodies, online casino operators and sportsbooks by floating the suggestion that the tax rate should be raised to 25%.

This was to be an increase from the existing sports tax of 13% and the online casino rate of 15%. However, after much debate and probably a little horse-trading, a compromise was reached. So from July 1 a flat 19.75% rate of tax has applied to all online casino and sportsbook operators’ profits.

While this might not be the best possible news for the operators themselves, it’s certainly going to give a boost to the state’s budget, currently set at $58 billion for the year. It’s expected that at least some of the money will find its way to helping education, infrastructure projects, health services and public safety.

Boom time, tax time 

It comes at a time when the online gambling sector is booming. In May the state’s total revenue from the activity hit $614.7 million, an overall increase of 20.5% on the figure for the same month back in 2024. This was also the highest monthly total for 2025 to date.

So there’s every expectation that when the new NFL season kicks in later in the year this figure is set to be dwarfed, breaking new records. Throughout the discussions and debates that have been held on the subject, Governor Murphy has shown himself to be mindful of the need to balance the benefits of generating tax revenue with allowing gambling operators to enjoy profit-making opportunities. He has also underlined his commitment to the ordinary New Jersey taxpayer.

In additions, he has taken great pains to put the proposed rise within the context of New Jersey’s pioneering role in introducing legal sport betting. It was the state that had the highest influence in successfully challenging Professional and Amateur Sports Protection Act in 2018. 

This led to the Supreme Court overturning the Act to allow individual states to legalize if they wished. Unsurprisingly, New Jersey was one of the quickest out of the blocks to do so.

It’s going to hit, but how hard?

That said, it’s not going to be an easy pill to swallow for many of the real money online casinos in the USA available at casino.org. It will undoubtedly hit their bottom line and may well mean that they need to be a little less generous in the welcome bonuses and other incentives that they offer to new players.

There have also been some fairly vociferous objections from casino organisations. Mark Giannantonio, President of the Casino Association of New Jersey was vocal in his condemnation of the 25% rise that was originally proposed. His point was that higher taxes might lead players to choose illegal offshore gambling operators instead. This would then expose them to playing with no official protection and liable to scams and other fraudulent activity. As yet he has not commented on the 19.75% increase but is still likely not to be in favour of it.

Another critic of the rise has been Jeremy Kudon, head of the Sports Betting Alliance. He cited the many jobs that have been created following the legalisation of sports betting as well as the revenue it already generates at the existing 13% tax rate. In 2024 online sports betting’s contribution amounted to almost $140 million while other online gambling raises $358 million.

It’s a national trend

Following a new law in Illinois that added a surcharge on operators for every bet placed this has seen some sportsbooks choosing to pass on this charge to their players.

From July 1st there has been an additional 50 cents charged per bet and it is feared that this may also drive sports fans into using illegal sports books instead. Ironically, avoiding this was one of the main objectives of the Supreme Court when the judges made their historic ruling back in 2018.

However, raising taxes on gambling profits does seem to be a national trend at the moment with several states including Ohio, Maryland and North Carolina either considering increases or having already made them.

So observers wait with bated breath to see what the effect on New Jersey’s gambling scene the new tax rate will have. And now that it’s been made into law there’s certainly no going back.