Less than five months after New Jersey won the Supreme Court battle that allowed its casinos to offer sports betting, taxes are going up. According to the Press of Atlantic City, Governor Phil Murphy signed off on a 1.25 percent sports betting tax increase last week to benefit the state’s ailing Casino Reinvestment Development Agency. That brings the tax on net sports betting revenue to 9.75 percent at brick-and-mortar sports books and 13 percent on mobile and online sports betting. 5n6m5b
For comparison, Nevada taxes its sports betting revenue at 6.75 percent, West Virginia at 10 percent and Mississippi at 12 percent. Sportsbooks haven’t opened in Pennsylvania yet, but the rate there will be 36 percent, while Delaware and Rhode Island (which expects to open for sports betting next month) effectively pay more a more than 50 percent tax rate under partnership programs with their state governments.
The CRDA will earmark the funds for “marketing and promotion.” According to the Press of Atlantic City, the additional tax from casino sportsbooks will be used to market Atlantic City specifically while the additional tax revenue generated from Monmouth Park and the Meadowlands Racetrack will be funneled directly to the towns in which the tracks are located.
1.25% NJ Sports Betting Tax Rate Increase Goes Into Effect in December. The Funds Will Benefit the State’s Casino Reinvestment Development Agency. 1xh4h
The new tax will go into effect in December.
Atlantic City is facing a serious debt crisis, and several years ago, the state legislature redirected funds that went to the CDRA to pay down the city’s debt.
“After a three-year hiatus, we are looking forward to filling the void with much-needed promotion of Atlantic City as a world-class vacation destination,” said Larry Sieg, CRDA director of communications and marketing to the Press of Atlantic City. “Our team looks forward to having the opportunity to once again get the DO AC brand into the consumer market to increase visitation and economic impact.”
The CRDA says it lost about $22 million in revenue after the state legislature redirected funds in 2016.
Through August, New Jersey’s handle was $152.7 million. September numbers are due out at the end of this week, and with the start of the NFL season, the expectation is that the numbers will dwarf August’s $95.6 million handle. In August, the state collected $921,702 in taxes.
