Sports betting continues to be an industry in which state governments are ever-adapting.
New Jersey proved that earlier this week.
The state Senate on Monday passed Assembly Bill 4230, capping a weeklong process that, according to the bill, changes “the purposes for which the 1.25 percent tax on sports wagering conducted at racetracks will be used” and alters the percentage and use of sports betting revenue at casinos.
How does it affect racetracks?
As it previously stood, state law for NJ sports betting distributed revenue to municipalities and counties in which a sports wagering lounge is located “or to an economic development authority of that municipality and county” with said revenue being used for “economic development purposes.”
The amendment that was passed Monday will result in revenue redistribution.
On top of the 8.5 percent brick-and-mortar tax and the 13 percent mobile wagering tax, initially, any sports betting lounge would be taxed an additional 1.25 percent to be paid to municipalities and counties that host those lounges.
Now, that extra 1.25 percent will only apply to racetracks. From the bill:
“This bill would provide instead that the Division of Local Government Services in the Department of Community Affairs will establish an account for each eligible municipality and county and shall ensure that the amounts generated from the racetrack shall only be distributed to the municipality and county in which the racetrack is located with 0.75 percent paid to the municipality and 0.5 percent paid to the county.”
The bill specifies, however, that sports betting revenue generated at Meadowlands Racetrack will be used “to pay Meadowlands adjustment payments to municipalities” in its district.
Throughout the state, revenue from wagering will be used to improve transportation and infrastructure, tourism, public safety and properties located on or near a racetrack.
What about Atlantic City casinos?
Additionally, this amendment eliminates the requirement of casino revenue generated by NJ sports betting would be subject to an investment alternative tax.
Instead, the State Treasurer will cut 1.25 percent of revenue for the marketing and promotion of Atlantic City.
It is emphasized in the bill that the fiscal impact of these amendments is “neutral,” as changes to the existing law do not modify the tax rate but rather redistributes that revenue.
Continuing to adapt as NJ sports betting gets rolling
New Jersey is still something of a test subject when it comes to legalized sports betting.
The Garden State rolled out single-game wagering June 14 with the first bets played at Monmouth Park and Borgata. The market will increase over the next few weeks.
Certainly, the industry will begin to boom in no time, and New Jersey lawmakers have already proven that they need to adapt with sports betting as it continues to plug along.