Sportsbook in New Jersey to Cease Operations Due to Escalated Tax Rates
In the bustling sports betting landscape of New Jersey, a significant shift has occurred with the state increasing its online sports betting tax rate from 13% to 19.75%. This move, while aimed at boosting state revenues, has raised concerns about the potential impact on sportsbooks operating in the Garden State.
The revenue figures for 2025 reveal a stark contrast between the state's leading sportsbooks and Ocean Casino's online sports revenue of just $235,429. This falls significantly short when compared to Resorts Digital's $141 million and Meadowlands' $186 million. However, there are no specific reports indicating which sportsbooks are at direct risk of closure due to the increased tax rate. Instead, the focus is on banning "microbetting"—rapid in-game wagers on immediate outcomes—due to concerns about impulsive gambling and potential manipulation.
The proposed ban, should it come into effect, would not necessarily lead to closures but would impose fines on violators. This regulatory change, while aimed at protecting consumers, may pose a challenge for smaller operators.
On a national scale, the impact appears limited, with major sportsbooks like DraftKings viewing microbetting restrictions as low-risk due to its small share of revenue. New Jersey, despite these regulatory changes, remains one of the strongest sports betting markets in the US, with around 80% of wagers placed online and a regulatory environment that allows multiple skins for casinos partnering with sportsbook operators.
Michael Molter, a sports betting analyst, closely follows legal sports betting bills, sports betting revenue data, tennis betting odds, and sportsbook reviews. He suggests that while New Jersey is tightening regulation to protect consumers from impulsive betting, there is no current evidence of increased online gambling tax rates forcing sportsbooks towards closure.
The increased tax rate, however, may force legal sports betting sites to reassess the cost of staying competitive. Smaller operators like Caesars Atlantic City (betPARX) and Ocean Casino (Prime Sports), which are currently struggling with low revenue, may need to consider belt-tightening measures or even exit the market.
Monmouth Park's year-to-date revenue of $6.3 million puts BetRivers' long-term online viability in question under the increased tax burden. Governor Phil Murphy claims the compromise is competitive and fair to taxpayers, but the market's survival is crucial for fairness.
Joe Brennan Jr., a prominent figure in the sports betting industry, highlights the high cost of doing business in New Jersey as a reason for sportsbooks to consider leaving. This could potentially lead customers to offshore sites where the state earns nothing.
As states like Maryland, Illinois, Ohio, and Louisiana also raise their tax rates, the sports betting industry is facing a challenging period. The low-performing licenses in New Jersey need to improve quickly to avoid potential major casualties in the 19.75% tax era.
In conclusion, while New Jersey's increased online sports betting tax rate poses challenges for smaller operators, the broader industry impact appears limited, with major sportsbooks adapting and continuing to operate successfully nationwide. The focus, however, remains on protecting consumers and ensuring a fair and responsible gambling environment.
[1] New Jersey Legislature Proposes Ban on Microbetting [2] New Jersey's Proposed Ban on Microbetting: What It Means for Sportsbooks [3] New Jersey Sportsbooks Face Fines, Not Closure, Under Proposed Microbetting Ban [4] Impact of New Jersey's Proposed Microbetting Ban on Large Sportsbooks [5] New Jersey Remains a Robust Sports Betting Market Amid Regulatory Changes
- The New Jersey Legislature has proposed a ban on microbetting, which concerns impulsive gambling and potential manipulation, and if enacted, could impose fines on violators.
- New Jersey's proposed ban on microbetting could impact sportsbooks in the Garden State, with the focus on protecting consumers rather than causing direct closures.
- Despite the proposed ban on microbetting, major sportsbooks like DraftKings view the restrictions as low-risk due to their small share of revenue.
- New Jersey remains one of the strongest sports betting markets in the US, with around 80% of wagers placed online and a regulatory environment that allows multiple skins for casinos partnering with sportsbook operators.
- Smaller sportsbooks operating in New Jersey, such as Caesars Atlantic City (betPARX) and Ocean Casino (Prime Sports), might need to reassess their business strategies to compete under the increased tax burden.
