• New Jersey is now awaiting the signature of its governor on two bills that would raise the gambling tax and kill sweepstakes
• The sweepstakes measure was an easier sale with lawmakers, but many remain split on tax hikes
• Both the gambling and sweepstakes industries pushed back against the proposals, each for their own reasons

A pair of gambling bills has cleared the legislature and is now awaiting Gov. Phil Murphy’s signature in New Jersey. Bill A5447 is focused exclusively on restricting sweepstakes casino operators in the Garden State and will effectively impose a ban on the vertical.

A pair of bills now await Gov. Murphy’s signature

At the same time, Bill A5803 is another long-debated proposal that wants to see the gambling tax in the state increased to 19.75% of gross gaming revenue for online gambling operators. Both bills enjoyed strong support as they made their way out of the legislature, although the tax bill was indeed a harder sell. The decision now rests solely with Gov. Murphy.

Sweepstakes operations have faced unprecedented scrutiny in the United States, particularly when gaming is concerned, even though the mode is established in historic precedent. Lawmakers in Connecticut, Montana, New York, Nevada, Louisiana, and elsewhere have attacked the model outright, but bans have been fairly rare so far.

Montana became the first state this year to ban sweepstakes, whereas Louisiana narrowly avoided a ban when Gov. Jeff Landry, a sweepstakes hawk himself, said that the bill pitched by the legislature was too broadly defined and could create headaches down the road if enacted.

Some states, however, have pushed back – Arkansas, Florida, and Maryland saw legislators fail to meet eye-to-eye on the issue of sweepstakes. No small opposition has come from the Social and Promotional Games Association (SPGA), a newly established trade group dedicated to protecting the sector’s interests.

Ill-conceived measure, says the SPGA in criticizing anti-sweepstakes bill

The SPGA has urged Gov. Murphy to oppose Bill 5447 as an ill-conceived ban that would have unintended consequences. In a statement shared with the media, the SPGA wrote:

"Governor Murphy has an opportunity to do what the Legislature would not—listen to facts, not fear. This bill doesn’t just mischaracterize an entire industry, it ignores data, undermines innovation, and puts New Jersey’s reputation as a forward-thinking leader in tech and entertainment at risk."

Meanwhile, increasing the tax rate can be hailed as both a qualified success and a calamity averted. Although the industry would grumble about the new tax hikes, operators were previously facing a 25% tax rate under a proposal backed by Gov.

Murphy. In other words, while the sweepstakes bill may yet face pushback from the governor’s office, the new tax rate is all but guaranteed.

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