New Jersey has enacted legislation significantly increasing tax rates on internet gambling activities across the state. Signed into law as L. 2025, A5803, the changes took effect July 1, 2025, and apply to multiple categories of online gaming revenue. Martin D. Hauptman, Esq., Partner in our Tax, Trusts, and Estates Practice Groups, explains what these changes mean for operators and stakeholders in New Jersey’s gaming industry.
What the New Law Changed
Under A5803, New Jersey has increased tax rates on several forms of internet-based gaming:
- Online casino gambling: Tax rate increased from 15% to 19.75%
- Internet sports wagering: Tax rate increased from 13% to 19.75%
- Fantasy sports contests: Tax rate increased from 10.5% to 19.75%
Notably, the legislation leaves other gaming-related taxes unchanged, including the tax on traditional casino gaming conducted in Atlantic City.
Who Is Impacted
These changes impact online casino operators, sports betting platforms, and fantasy sports providers conducting business in New Jersey or accepting wagers from New Jersey residents. Since the higher rates are now in effect, affected businesses may already be experiencing changes to margins, pricing strategies, and overall revenue performance. Companies with multistate operations should also consider how New Jersey’s increased rates compare with other jurisdictions, particularly when evaluating ongoing operational and tax planning decisions.
Key Tax Considerations
With the higher tax rates now in place, businesses should review:
- Revenue reporting and tax compliance procedures
- Cash flow and profitability assumptions
- Contractual arrangements with platform partners and affiliates
- Internal controls for properly classifying internet gaming revenue
Accurate classification of revenue remains critical, as the increased rates apply specifically to internet-based gaming activities.
Moving Forward
New Jersey’s tax increases reflect the state’s continued reliance on digital gaming as a significant revenue source, particularly as online wagering continues to grow. As the regulatory landscape evolves, operators should continue monitoring legislative and regulatory developments that may further affect the gaming and wagering industry, including potential changes to compliance requirements, reporting obligations, and future tax policy.
Next Steps
Businesses engaged in online casino gaming, internet sports wagering, or fantasy sports should ensure their tax filings and reporting systems reflect the current rates now in effect. Ongoing tax planning and compliance reviews can help reduce risk and identify efficiencies under the new structure.
For guidance on how these changes affect your business or to discuss tax planning strategies related to gaming and wagering activities, contact Martin D. Hauptman at mhauptman@mblawfirm.com or 973-243-7912.