New Jersey is on track to hit or exceed tax revenue projections from legalized sports betting.
Since legal sports betting went live June 14, it has generated $4.15 million in taxes for the state coffers, $3.85 million of which was collected since the beginning of the 2019 fiscal year July 1.
“The first few months of collections are encouraging, and major sporting events such as the NFL playoffs, the Super Bowl and March Madness are still pending,” said William Skaggs, spokesman for the state Department of the Treasury. “With three-quarters of the fiscal year remaining, the year-end target of $25 million for (fiscal year) 2019 is achievable.”
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The state taxes sports wagering revenue for bets placed in person at a licensed racetrack or Atlantic City casino at 8.5 percent, while bets placed online or from a mobile device are taxed at 13 percent. In neighboring Pennsylvania, which is set to launch sports betting in the near future, the tax rate on sports betting is 36 percent. Nevada, where sports betting has been legal for decades, has a tax rate of 6.25 percent.
Last month, Gov. Phil Murphy signed a bill dedicating an additional 1.25 percent tax, on both in-person and online revenue, to the Casino Reinvestment Development Authority from sports wagers placed through an Atlantic City casino licensee.
The additional tax, which will take effect in December, will be used for “marketing and promotion” of Atlantic City, according to the legislation.
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Tony Marino, a local industry analyst, said the Garden State’s sports betting tax rates are beneficial in a changing gaming environment where online and mobile betting is becoming more commonplace.
“The state is a big winner because both internet gaming and sports wagering revenues are taxed at higher rates than land-based win, plus both are increasing at a much higher ratio to land-based revenues,” Marino said, following the release of September’s gaming revenue figures. “As more sports bets are placed over the internet at higher tax rates in coming months, state gaming tax revenues on a year-over-year basis can be expected to increase even more.”
The taxes derived from sports betting revenue are split between the state General Fund and the Casino Revenue Fund, Skaggs said.
The early success of sports betting at the state’s two licensed racetracks has not yet renew…
The Casino Revenue Fund was established in 1976 with the provision that state revenue derived from casino gambling would be applied solely for the purpose of “providing funding for reductions in property taxes, rental, telephone, gas, electric and municipal utilities charges of eligible senior citizens and disabled residents of the state.”
The fund’s authorized use was expanded in 1981 to include additional or expanded health services or benefits and transportation services or benefits to eligible senior and disabled residents, according to the Treasury.
According to budget projections from the Treasury, casino taxes will fund more than $237.6 million in services throughout the state, including $205 million on housing programs for those with developmental disabilities.