We all remember that New Jersey was one of the first states in the US to legalize online forms of gambling back in 2013. The legislation at the time was designed to authorize online operators for a 10-year period, which expires in November 2023.
Trenton’s lawmakers have already made a significant effort to extend the current laws and permit online casino operators in New Jersey to continue with their gambling ventures. Therefore, the new bill proposes a new 10-year authorization for New Jersey casinos that will expire in 2033.
That said, there is a lot of support for this bill and New Jersey’s online casino operators. Republican Senator Vince Polistina who represents Atlantic City in the State Legislature is one of the supporters and sponsors of the new bill.
Right after the Senate Budget and Appropriation Committee unanimous vote to support the bills, Polistina said: “Internet gaming has kept New Jersey at the forefront of an evolving gambling industry. This extension supports the integral role that the internet plays in shaping the current and future success of casinos in New Jersey.”
However, this new bills till needs to pass and be approved by Senate, as well as the Assembly before Governor Phil Murphy can sign it into law.
The money talks
It’s no surprise that the new bill has received little to none at all political opposition. Let’s not forget that New Jersey online gambling revenues are taxed at higher rate than land-based casinos. While online operators pay 15% tax, Atlantic City land-based casinos pay only 8% revenue tax.
That being said, the state of New Jersey has earned over $1.065 billion in tax revenue from online gambling since the introduction of the original bill back in 2013. Not only that but online gambling activities have contributed additional $93 million to the state coffers in the first quarter of 2023, compared to $54.4 million that Atlantic City operators have generated.
So it’s only logical that New Jersey would want to extend authorization for online casino and gambling operators for another ten years. The astonishing tax revenue is argument enough for everyone to support this bill to be passed in to law before November this year.
Will New Jersey online casinos continue to fair this well in the future?
It’s safe to say that market projections for gambling industry’s growth in New Jersey look promising. After all, the state has reported a steady growth of gambling percentage year after year, since the passing of the original bill a decade ago. For example, back in 2014, 4.5% of statewide total was Internet revenue alone.
Four years later in 2018, that percentage grew to 10.3%, which was all New Jersey’s online gaming revenue. During the COVID-19 pandemic two years later in 2020, when Atlantic City casinos were forced to close down for the time being, the online gaming revenue share in state-wide market almost doubled to 20%. This growth may have been accelerated due to the pandemic but the revenue growth didn’t slow down afterwards.
As a matter of fact, in 2022, online casino operators managed to generate over $1.66 billion in revenue, which further increased gambling shares generated form Atlantic City’s online gambling and sports betting to 29.6%. Therefore, for the past decade, online casinos have a 35% share in all gambling revenue in the state of New Jersey.
Market projections further predict additional increase in revenue for the upcoming fiscal year. According to the state documents, the forecast for the upcoming fiscal year beginning on July 1st predict an overall increase in state Casino Revenue Fund collection, which are expected to reach $526 million. Internet gambling revenue will account for $287.7 million of that total sum, which is more than a half of total revenue for the 2024 fiscal year.