Tax laws

New Jersey Governor Murphy Signs New Sports Betting Tax Laws

New Jersey Sports Betting Tax Update

On Jan. 18, New Jersey Governor Phil Murphy signed a bill that provides tax breaks on credits used to entice players to brick-and-mortar casinos and online operators tied to them in the state.

Promotional game credits available for taxation include credits, chips or other incentives that entice players to place a bet. Promotions include deposit match bonuses, risk-free bets and other similar offers of other values.

This law comes into force just a few weeks after the launch of online betting in New York. Industry experts expected the launch to affect New Jersey’s gambling market, as many New Yorkers crossed the border to place bets in New Jersey before it was legalized in the United States. Empire State. With more incentives available to bet in New Jersey, they can try to combat the foreseeable changes in the New Jersey market. The new law should incentivize gaming operators to grant more credits since their promotional credits revenue is not subject to the usual tax to which betting is subject.

According to the tax estimate of this bill, Bill A4002“the first $12 million of promotional gambling credits for Internet sports betting issued by all casinos and racetracks that hold a sports betting license would still be taxed, but any excess amount would be deductible from gross sports betting revenue on The first $8 million in non-Internet sports betting promotional gaming credits issued by all casinos and racetracks that hold a sports betting license would still be taxed, but any excess amount would be deductible from gross non-internet sports betting revenue. Internet. “

Governor Murphy and Bill A4008

Originally, the bill was intended to benefit brick-and-mortar casinos and internet gambling until it was later adjusted to exclusively benefit brick-and-mortar casinos as recommended by Governor Murphy.

Governor Murphy submitted a conditional veto to the bill in November after it was approved by the House and the Senate. The veto read, “as operational closures resulting from the coronavirus disease 2019 (COVID-19) pandemic have harmed the state’s tourism economy generally, and the casino and brick-and-mortar industries and mortar, in particular, online casino games and online sports betting operations have flourished.In fact, these operators have seen record performances in recent months, with sports pool operators taking more than a billion dollars wagered with state-licensed sportsbooks in September 2021 alone, of which more than 90% was wagered via online sportsbooks.

This bill comes after two years of a pandemic that has particularly affected physical establishments. However, since 2020, gambling revenues have seen a marked improvement. In fact, from December 2020 to December 2021, the New Jersey gambling market saw a 29.1% increase.

“It’s good for the customers because they get the promotional play credit, and it’s good for the casinos and racetracks because they get the tax deduction,” said Bill Pascrell, lobbyist for Trenton.

Some people, including Pascarell, think online operators shouldn’t be excluded from the bill or treated differently based on simply being online, because everyone has suffered the fate of the pandemic. “Why should online gambling companies at racetracks be treated any differently than online gambling companies at casinos?” Pascal asked.