As New Jersey legislators consider proposals to raise taxes on its online-gambling operators, one former politician with in-depth knowledge of the topic has loudly proclaimed that any tax hikes would be a bad, bad idea. The retired politician, former State Senator Raymond Lesniak, prominently decried the idea in an op/ed published this week on one of the state’s largest online news portals, NJ.com.
“A big mistake,” Lesniak stated, and he’s in a position to know. Lesniak championed the legalization of several forms of online gambling, including online poker, along with live sportsbetting. Lesniak introduced bills and battled for the legalization of the gambling expansions for a decade, and that included battles with federal officials over the reach of the Professional and Amateur Sports Protection Act of 1992 (PASPA), which until it was overturned by the US Supreme Court in 2018, blocked all US states except Nevada from offering single-event sports wagering.
Lesniak retired soon after PASPA was overturned, ending a 40-year career as a New Jersey state senator, the second-longest tenure in New Jersey’s history. The online-gambling framework and overall gambling expansion he worked for has served New Jersey well, stabilizing what was once a dying Atlantic City casino market and helping carry the state’s gaming operators through the COVID pandemic closures.
Low tax rates spurred growth
In his op-ed, ‘Don’t raise tax on online gambling‘, Lesniak argues that New Jersey’s relatively low tax of 15% was one of the keys behind the resurgence of the state’s ailing gambling industry. Some of today’s Jersey legislators have eyed the significantly higher tax rates assessed on gaming operators in two neighboring states, Pennsylvania and New York, and are wondering if a larger slice of iGaming revenue is there for the taking.
It’s a delicate balance. Higher tax rates ultimately result in worse odds for gamblers, which in turn reduces the amount of wagering that those gamblers make. That leads to fewer jobs and less overall revenue, perhaps even fewer operators participating in the space.
“Don’t kill the goose that laid the golden egg,” Lesniak stated, “and don’t compare apples to oranges.” The second half of that quote refers to another way that New Jersey differs from its larger neighbors, which return far more of the taxes taken in to the operators in the form of subsidies. “Our casinos and racetracks need the added revenue from online gaming and sports betting as do their thousands of employees and the families they support,” he concluded.