N.J.’s gambling industry is a bonanza. Now let’s take care of its victims | Opinion

By John McKeon

Online gambling is a gold rush bringing economic windfall to New Jersey. The virtual casinos that live in the pockets and purses of millions of Garden State residents don’t glitter along the shores of Atlantic City, but are just as enticing.

Record revenue climbs with a click or a swipe, but the jackpot comes with a price.

New Jersey online casinos had a flush October, reporting a record-breaking $213 million in revenue, with sports books – where 90% of all sports bets are placed online in our state — garnering $77.5 million. The industries have generated almost $3 billion in revenues combined, year-to-date. Sports betting and its online variant were legalized in New Jersey in 2018 and have become a $10 billion industry nationally, with the State’s industry generating some of the highest gross revenues.

The revenue supports a range of programs throughout the State, including treatment centers, but it’s not enough to protect the growing and vulnerable population of problem gamblers.

As with cigarette bans, we must take the lead in addressing the growing gambling addiction crisis. The dark side of the sports betting boom is the staggering human cost: An estimated 200,000 New Jerseyans grapple with addiction, some starting as young as 7 years old.

And this trend is especially grim: The Council on Compulsive Gambling of N.J. reports that while 1-3% of adults nationwide are problem gamblers, that number is double in New Jersey.

We can’t bet on the federal government to ensure gambling companies are reevaluating their regulatory compliances and working to address new ways gambling habits can become unmanageable. Sixty-one percent of New Jersey residents reported gambling last year. The Rutgers University Center for Gambling Studies’ 2023 Prevalence Report finds online gambling is most popular among young adults 18-24. In 2017, only 7% of this age group preferred online betting; that number surged to nearly 34% in 2023.

State legislation will strengthen protections in the gaming industry for children and chronic gamblers and increase taxes on online gambling and sports betting.

It’s absurd that New Jersey’s tax rate on online gaming and sports betting is less than half that of neighboring states. For comparison, New York’s online sports betting operators pay 51%; in Pennsylvania, it’s 36%. Those are two of the highest online sports betting tax rates in the U.S.

New Jersey’s relatively 13% tax rate on online sports betting generated — year-to-date in 2024 — $115.3 million.

In New York, $848.1 million. Pennsylvania’s $148.2 million in tax revenues is 31% less than New Jersey in sports betting gross revenues.

There are stark differences in online casino revenue taxes as well.

Online casino operations in the Garden State date back to 2013, but despite the recent surge in popularity, the total tax rate of 15% has collected year-to-date $292 million. While New York is mulling legalizing a regulated market, Pennsylvania’s 54% tax rate has generated $767.6 million despite PA’s online casino industry generating $200 million more in gross revenues than New Jersey

I have introduced one bill that will strengthen protections in the gaming industry for children and chronic gamblers, and another bill that would raise funds from these businesses, in part, to support gambling addiction treatment programs.

We need to hold these online gaming businesses to account and demand that they do their part to keep New Jersey’s youth and vulnerable problem gamblers safe from habits that can quickly become unmanageable.

The dangers of such easy access to gambling mirror the widespread cigarette use of past decades — it, too, is a public health crisis. By taking legislative measures to set high accountability standards, New Jersey can be at the forefront of addressing the detrimental issues related to online gambling and set an example for other states to follow.

Sen. John McKeon has represented the 27th Legislative District in Essex County since 2002.

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