State and Industry at Odds Over Gaming Tax Revenues. The numbers don’t seem to work out. Formerly projected state revenues from new gambling regulations might not be realistic. As a result, many insiders question their impact on the new state budget. In general, the New Jersey online gambling sector is positive about the future. At the same time, it warns about uncertainty, while finally, new legislation is in place.
The state is optimistic
The NJ state officials project a $13 million in tax revenue from sports betting. That is for the fiscal year that begins July 1. The number transcended via state Treasurer Elizabeth Muoio’s testimony from last Monday. Clearly, the amount doesn’t seem to have a major impact on the $37.4 billion state budget proposed by Gov Phil Murphy.
Indeed, some officials expressed optimism, what’s more, they consider the estimates conservative. In Senate President Stephen Sweeney’s words, it is the first time out. So the state is not quite sure what to expect. Still, state Assemblyman Ralph Caputo expects the final tax haul to be “better than that”.
Governor Murphy supports the figures butů
Up until today, Gov. Murphy stands by Muoio’s numbers. Obviously, officials hope the new betting rules will benefit New Jersey’s fiscal books. Nevertheless, Sweeney warns not to be overoptimistic.
Murphy’s proposed hikes will have to find also other sources than sports betting only. A source in Murphy’s administration, under the condition of anonymity, agrees. The state never saw online betting as a game-changer for the budget. Instead, it is just another shot of revenue.
Industry remains cautious
Last week, the US Supreme Court gave New Jersey a huge victory. The ruling, in effect, ended a 7-year long legal battle to legalize sports betting. The verdict overturns the federal ban on such wagering. Now states across the US can legalize bets on football, basketball, and other sports. That is, once they adopt new legislation.
But the Supreme Court’s ruling has a tricky part. Indeed, it allows other states to adopt the same new regulation, too. In effect, NJ lawmakers are rushing against the clock to pass legislation. They need to get them out before others and thus become the first US state outside of Nevada with fully legal online sports betting.
more on tax
The estimated $13 m in tax revenue is based on tax rates between 8 and 15 percent, Muoio said. So, that means the state expects to bring in $124 million in total revenue from the sector. As proposed, revenues would be taxed as per the place that pays them out. From sports betting at casinos and tracks, they would be subject to an 8 percent tax rate. In comparison, online bets would be at a 12.5 percent tax rate.
So let’s see what the future has in store for us and if the estimates are conservative or if optimism inflated them!
Photo By: Julio Cortez | AP