New Jersey Governor Phil Murphy is putting the finishing touches on a tax hike for online casinos and sports betting operators to 20%. The deadline to do so before the start of the fiscal year is June 30.

Gov. Murphy proposed a tax hike up to 25% in his Summary of Budget Recommendations for FY2026.

Despite being one of the earliest adopters of each for of gambling, New Jersey’s tax rates on both segment are some of the most business friendly in the country.

Online sports betting is taxed at 13%, a bit higher than the 8.5% tax rate for retail sports betting. A 19.75% tax rate represents a nearly 52%increase from the current online betting rate.

Online casino, meanwhile, would see a 31.7% increase from its 15% tax rate. New Jersey is just the latest market where we have seen operators accept modest tax increases. It shows that the industry is willing to negotiate, and even believes there is room for states to increase their tax revenue.

The hope is that other states will see this and choose to pursue more “operator-friendly” tax increases instead of proposing deep cuts into operators’ revenues.