Summary
- New Jersey is now awaiting the governor's signature on two bills: one to increase the gambling tax and the other to eliminate sweepstakes.
- The proposal for the sweepstakes passed more easily with lawmakers, but there is still significant division over the issue of tax increases.
- The gambling and sweepstakes industries both opposed the proposals, each for their own reasons.
Two gambling bills have been approved by the legislature in New Jersey and are now awaiting Governor Phil Murphy's signature. Bill A5447 specifically targets sweepstakes casino operators in the state and aims to effectively ban this type of gambling.
A pair of bills now await Gov. Murphy’s signature
Bill A5803 is a proposal that aims to increase the gambling tax to 19.75% of gross gaming revenue for online gambling operators. This bill, along with its counterpart, received considerable support as they progressed through the legislature, although the tax bill proved to be a more challenging proposition. The final decision now lies with Governor Murphy. In the United States, sweepstakes operations have been under significant scrutiny, especially those related to gaming, despite their long-standing history. Lawmakers in states like Connecticut, Montana, New York, Nevada, and Louisiana have opposed the model, though outright bans remain relatively rare. Montana led the initiative this year by instituting a ban on sweepstakes. Louisiana almost followed suit, but Governor Jeff Landry, known for his critical stance on sweepstakes, argued that the legislature's proposed bill was too vague and could lead to future complications. Conversely, states such as Arkansas, Florida, and Maryland saw legislative disagreements on the sweepstakes issue. The Social and Promotional Games Association (SPGA), a newly formed trade group, has been actively defending the interests of this sector against such opposition.
Ill-conceived measure, says the SPGA in criticizing anti-sweepstakes bill
The SPGA has called on Governor Murphy to reject Bill 5447, describing it as a poorly thought-out ban with potential unintended consequences. In a statement to the media, the SPGA asserted: Governor Murphy has the chance to do what the Legislature could not—consider facts over fear. This bill not only misrepresents an entire industry but also disregards data, stifles innovation, and jeopardizes New Jersey's standing as a progressive leader in technology and entertainment. On another note, the increase in the tax rate might be seen as both a modest success and a crisis averted. Even though the industry may complain about the new tax hikes, operators previously faced a proposed 25% tax rate supported by Governor Murphy. In essence, while the governor's office may still challenge the sweepstakes bill, the new tax rate is virtually set in stone.
