New Jersey Proposes Gambling Tax Hikes in Budget, Crypto Gets No Mention

The latest budget plans in New Jersey propose increasing the tax rate on iGaming and online sports wagering.

Governor Phil Murphy’s Summary of Budget Recommendations suggests increasing the iGaming and sports wagering tax rates to 25 percent.

This is nearly double the current sports betting tax rate of 13 percent and a significant rise on the current 15 percent gaming tax.

Tax receipts for FY2025 to the Casino Revenue Fund grew 14.5 percent year-to-date, generating a revised FY2025 forecast of $642.2 million in tax revenue. The hike in tax rates are expected to generate a further $322.6 million for the Casino Revenue fund, giving a 54.2 percent increase and contributing $989.9 million to state coffers.

Murphy’s Vision for NJ: Clean Energy, AI, and Fintech—But No Mention of Crypto

The budget aims to revive New Jersey’s “reputation as a bedrock for revolutionary innovation.” It outlines several investment sectors, including “clean energy, fintech, filmmaking, television production, generative artificial intelligence, and more.” The 110-page dossier does not mention cryptocurrency.

The Mayer of Jersey City, Steve Fulop, who is also running for next Governor, is a staunch crypto advocate.

He suggested last year that he planned to allocate part of the city’s pension fund to crypto exchange-traded funds. He also stated: “I’ve been a long time believer (through ups/downs) in crypto but broadly, beyond crypto I do believe blockchain is amongst the most important new technology innovations since the internet.”

NJ’s New Tax Plan: How Much Extra Revenue Will It Actually Generate?

Gov. Murphy plans to spend a record $58.1 billion and will fund this largely through tax increases. Gambling is not the only product that will be impacted, with other ‘vices’ also seeing proposed tax hikes.

The tax on cigarettes will rise $0.30 per pack, from $2.70 to $3.00 per pack. This is forecast to generate an additional $41 million in tax revenue for FY2026, which would more than offset the continued decline as consumers shift towards other nicotine products such as vaping.

Due to the continued shift from cigarettes, tax receipts for vaping and other tobacco products have increased. In FY2025, the forecast of $46.1 million in tax revenue is $8.6 million above the expected level. Vapes will see an increase in the liquid nicotine rate from $0.10 per milliliter to $0.30 per milliliter and the Container E-Liquid rate from 10 percent to 30 percent. This is expected to generate $58.6 million in total tax revenue, up 27.1 percent.

Is NJ’s Higher Tax on iGaming & Sportsbooks a Risky Move?

The hike in the gambling tax rate has come as no surprise to some but will still attract pushback from operators. Tom Reeg, CEO of Caesars Entertainment, told investors: “I think it’s a headline cycle we’re in. It’s a function of where state budgets are versus where they’ve been in the last couple of years.”

Operators opposed to the tax rate suggest that making the state less competitive from a tax perspective could give rise to additional activity not regulated under the New Jersey legislature.

This could include sweepstakes casinos, crypto iGaming, and sportsbooks. NJ lawmakers are currently considering legislation that would bring sweepstakes casinos under the same iGaming laws, which could generate additional revenue for the state.

New Jersey lawmakers have until 30 June 2025 to finalize the budget plan for FY2026.