Key points:
- Two new gaming bills have been voted in in New Jersey
- Sweepstakes have been banned; penalties will be imposed on those who utilisie them
- Sports betting and iGaming taxes have been increased to 19.75%
The state of New Jersey has banned sweepstakes betting and has introduced an increase in online gaming taxes.
The ban on sweepstakes came following Bill A5447’s passing by both houses, with a final vote of 34-5 (one abstaining). The bill was first introduced in March, with the bill being subsequently transferred to the Assembly Tourism, Gaming and the Arts Committee, then the Assembly Appropriations Committee, before being voted on and passed on Monday 30 June.
The bill prohibits sweepstakes gaming and establishes penalties for using them as part of illegal gaming, with the Division of Consumer Affairs and Division of Gaming Enforcement tasked with enforcing these penalties.
The ban comes despite vocal protests from the Social and Promotional Games Association (SPGA). While initially praising the state’s action regarding sweepstakes in January, it went on to caution against voting the bill in, calling it “reckless” and “shortsighted.”
Good to know: In May, New Jersey regulators signed a Memorandum of Understanding with the UAE, focusing on cybersecurity and responsible gaming
Also, in a 25-14 vote, the New Jersey Senate has voted to increase online gaming taxes. Before the vote was passed, iGaming was taxed at 13%, while mobile sports betting was taxed at 15%. Now, both will be taxed at 19.75%, with Governor Phil Murphy to sign the bill into law.
The decision to increase the tax follows other tax rises on iGaming and sports betting in the US. Illinois passed House Bill 1928 in June, which will charge sportsbook operators $0.25 per wager tax for the first 20 million wagers and $0.50 per wager afterwards.
The decision has spurred FanDuel and DraftKings, the leading sports betting operators in the US, to charge its users a $0.50 transaction fee on bets in The Prairie State. Though, it has been debated just how impactful this will be.
