New Jersey Approves Sweepstakes Ban & Gambling Tax Hike

By Matt Speakman,
Betting Expert at online-gambling.com

Matt Speakman Betting Expert at online-gambling.com

A die-hard fan of the Patriots, Matt Speakman is an expert on everything related to sports betting and DFS sites. Over the years, he has proven a valuable asset for our team at online-gambling.com. You can find Speakman's professional tips and tricks in any of his many articles on the website.

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Last updated: July 12, 2025

On June 30, 2025, New Jersey lawmakers approved Assembly Bills A5447 and A5803 with strong bipartisan support. The former effectively bans sweepstakes casinos and dual-currency sweepstakes games. The latter increases the online gambling tax rate to a uniform 19.75%. The two bills now await Governor Phil Murphy’s signature before becoming law.

Bill A5447: Ban on Sweepstakes Casinos

New Jersey will join five other states (Mississippi, New York, Connecticut, Montana, and Nevada) in outlawing sweepstakes casinos in 2025. Assembly Bill A5447 targets these platforms as illegal gambling operations, closing a loophole that has allowed them to operate outside traditional gambling laws.

The bill defines sweepstakes broadly as “a promotional, advertising, or marketing event, contest, or game, whether played online or in-person, in which something of value, such as a prize or prize equivalent, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.”

Sweepstakes operators violating the ban will face significant penalties of $100,000 for a first offense and $250,000 for every subsequent offense (enforced by the Division of Consumer Affairs and the Division of Gaming Enforcement).

The bill exempts traditional sweepstakes promotions linked to food or beverage purchases, ensuring that common marketing campaigns by major brands remain unaffected.

Bill A5803: Gambling Tax Increase

In addition to the sweepstakes ban, bill A5447 will also increase the online gambling tax rate to a uniform 19.75%. Currently, New Jersey taxes these activities at varying rates, including 13% for sports betting, 15% for iGaming, and 10.5% for daily fantasy sports (DFS).

Initially, Gov. Murphy proposed a higher tax rate of 25%. Ultimately, lawmakers and industry stakeholders agreed on a compromised 19.75%. According to preliminary estimates, the tax raise will generate substantial additional revenue for New Jersey’s fiscal year 2026.

Opinions and Impact

The two bills have drawn mixed reactions. Consumer advocates and lawmakers praise the sweepstakes ban, whereas the Social and Promotional Games Association (SPGA) oppose the ban. They believe this could unfairly target legal sweepstakes platforms.

Regarding the online gambling tax increase, New Jersey officials consider this a positive change and a necessary state revenue addition. Operators are unhappy with the new bill, as they are concerned that it may reduce their profitability and push gamblers to unlicensed platforms.

And while all sides raise valid points and concerns, they need to work together to ensure the integrity of the industry and the safety of players. In recent years, finding the right balance between a thriving gambling market and consumer protection has become increasingly more complicated.