A senator has proposed greatly increasing New Jersey online gaming taxes, making online casinos pay more on the revenue they generate.

The state of New Jersey is one of the nation’s most robust markets for online casino operators. An increase in taxes could see a large windfall for the state, but any proposed bill would likely meet stiff opposition from the industry.

Demand for online poker, slots and table games is higher than ever, but these proposed tax rises could make operating in New Jersey far less appealing and lucrative.

New Jersey Online Gaming Taxes Could Drastically Increase Under S3064

This new bill, S3064, has just been pre-filed so far. Sen. John F. McKeon is yet to see his proposal undergo an initial inspection from the New Jersey Office of Legislative Services.

But the bill’s main aims include increasing the state’s tax rate for online casinos and sports betting revenue to 30%. At present, rates for those forms of gaming are 17.4% and 14.25% respectively.

Such a hike in tax rates would mean hundreds of millions of dollars in taxes for the state. If the proposed new rates had been in place since online gaming was legalized in 2013, New Jersey would have collected an extra billion dollars in tax revenue.

But while that money is only theoretical, so too is this new legislation, for now at least. The proposed tax rises will almost certainly meet strong opposition from the powerful lobbying arm of the state legislature.

Atlantic City Casinos May Try To Kill Bill

One group that may play a role in opposing this bill are Atlantic City casinos. Although in-person gambling earns the vast majority of revenue, they do have a dog in this fight due to their online gaming revenues.

Any increase in online casino taxes would reduce income for these casinos. Atlantic City casinos are among the most powerful lobbying groups in Trenton, so their opposition could be enough to kill any proposals.

Discussing the legislation, Casino Association of New Jersey President Mark Giannantonio said the association “strongly opposes any proposed tax increase for online gaming.”

Casinos have already been able to lobby for a revenue-sharing program with the state, which excludes any online gambling revenue, instead of paying property taxes.

Those changes to the casinos’ PILOT (Payments In Lieu Of Taxes) program are pending litigation, but such a clause was at the centre of the lawsuit.

Should the casinos mount a serious opposition, S3064 would likely be finished regardless of who it ends up in front of.