After the lapse of PASPA in May 2018, many states have legalized sports betting. The governor of New Jersey, Phil Murphy is still uplifting the sports betting industry of his state.
Murphy said that he wants his city to be a US hub for sports wagering. The market potentials are more attractive than New Jersey. The trend of sports betting is rapidly growing up. New Jersey is placed in the second position to have sports betting market after Nevada. But it will not last for a long time.
New York can easily dominate the Garden state. Murphy said that they want the industry should plant their flag here. In 2018, New Jersey started regulating sports betting and around $3.5 billion in bets have been taken. It was reported that 85% of the betting was through the internet. New Jersey is different from Nevada as it allows its users to register by the mobile or online medium.
The tax rate on sports betting in New Jersey is as follows:
- Retail Revenue: 8.5%
- Additional tax on Retail Revenue: 1.25%
- Online/Mobile Revenue: 13%
It is noted that sports betting is a business with low-margin. Sportsbooks hold around 6% of handling in the game win. Murphy said that there is a range of $25 mm to $50 mm revenue item for the state. Every penny of the revenue is taxed. But, then folks asked to increase the tax. Murphy continued that they do not have any plans to increase the tax as they are paying is reasonable.
According to the report, 1.25% of an additional tax will get the limelight in December. Then, New Jersey might increase the rate also. Pennsylvania has a tax rate of 36% on the revenue of sports betting.
The sportsbooks of New Jersey paid the tax of $2,021,711 on retail sports wagering for the first seven months of the year. The additional tax of 1.25% goes to Reinvestment Development Agency for marketing and promotion of the Atlantic City. It is revealed that Mobile sportsbooks paid around $13,494,945 through July.