Online gaming will live on in New Jersey, but the extension is not as long as some were hoping. Gov. Phil Murphy approved a law that allows the state to extend its online gambling regulations for five more years. Although it falls short of the proposed 10-year extension, it ensures that online casinos in New Jersey will remain operational until 2028.
The new law went into effect just hours after the state Assembly (76-2) and Senate (37-0) voted in favor of the extension that had been amended twice without any explanation. Supporters argue that the legislation helps to keep New Jersey in a leading position within the changing gambling industry.
“The legalization of online gambling and sports betting was a catalyst for struggling casinos in the aftermath of the Great Recession,” said Senator Vince Polistina (one of the bill’s sponsors). “It has created a number of good-paying jobs and has generated millions of dollars in tax revenues for the state,” he said.
Supporters Say Online Gaming Helps New Jersey Economy
New Jersey initially authorized online casino gambling in 2013 for a 10-year period, which will end in November. Supporters claim that over the past decade, online gambling has greatly contributed to the economy by creating jobs and providing entertainment for residents and tourists.
Tax revenue from online casino gambling has also consistently risen and now plays a significant part in the state’s annual tax collections. In fact, from January 2019 to May 2023, the state earned almost $64.3 million more in tax revenue from internet gaming (excluding New Jersey sports betting) than from Atlantic City casinos.
Each year since 2020, taxes from online gaming have surpassed taxes from in-person gambling in Atlantic City. In 2023, tax revenue from online gaming ($117 million) also exceeded tax revenue from Atlantic City gambling ($70.5 million). The Casino Revenue Fund alone has generated over $250 million.
Online gambling is subject to a higher tax rate of 15% compared to the 8% tax rate on revenue generated by Atlantic City casinos and the 13% tax rate on revenue from NJ sports betting.
Why the Extension Is Needed
State law granted New Jersey online gambling a 10-year period to operate, unlike Pennsylvania, which did not set an end date for its online casino legislation.
According to the law, online casinos had the authority to offer any game that Atlantic City brick-and-mortar casinos already offered. Atlantic City is the only city in the state permitted to have casinos.
The purpose of the 10-year lifespan was to provide flexibility. If online revenue negatively impacted traditional casinos, lawmakers could make changes to protect them. Additionally, if new advancements in iGaming emerged that fell outside the scope of existing laws, politicians could revise the legislation accordingly.
As it turned out, no significant adjustments were necessary. However, there were discussions about the duration of the new extension. Ultimately, lawmakers reached a consensus on a five-year extension, but some are speculating that it will be used as leverage to increase gambling tax rates. It remains to be seen.
*Bookmakers Review will continue to follow the developments.
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