TAX POLICY
Comparing tax rates and tax takes between New York and New Jersey ONE STATE HAS A HEADLINE TAX RATE OF 50+% WHILST IN THE OTHER IT IS AS LOW AS 8%. EMMA TOMPKINS EXPLORES WHAT THAT MEANS FOR STATE REVENUES AND SUSTAINABILITY AND ASKS WHETHER THE TWO STATES ARE LIKELY TO CONVERGE
L egalized gambling has experienced rapid growth across the country in recent decades; as of 2023, forty-eight states allow legal gambling in some capacity. Recently, the gambling activity that has garnered fast-growing, nationwide popularity is sports betting, making an appearance in thirty-one states and the District of Columbia, including the twenty-one states who support online betting. 1 In 2021, the gambling industry’s gross revenue reached an all-time record in the United States, totaling US$53.4 billion. During just the first eleven months of 2022, the industry’s gross gambling revenue reach a new record of US$54.93 billion, smashing the previous year’s record by 13.5% - and the new record does not even account for the month of December 2022. 2 This significant and record-breaking rise in sports betting revenue has been invariably accompanied by increased regulation
and varying taxation regimes by the states who sponsor such activities. New York and New Jersey, although neighboring states, illustrate the broad range of state approaches to the taxation of sports gambling activities. This Article explores the stark contrast between the two states’ policies, the effect of New York’s entrance into the sports betting market on New Jersey, and the financial implications and sustainability of the states’ respective policies. New Jersey’s rapid ascent to become the nation’s #1 sports betting destination Federal legalization of sports betting: New Jersey has enjoyed immense financial success since the federal legalization of sports betting, following the state’s groundbreaking judicial
1 Interactive U.S. Map: Sports Betting, Am. Gaming Ass’n, https://www.americangaming.org/research/state-gaming-map/ (last visited Apr. 6, 2023). 2 Will Yakowicz, FORBES (Jan. 13, 2023), https://www.forbes.com/sites/willyakowicz/2023/01/13/us-set-gambling-record-in-2022-with-more- than-549-billion-in-revenue/?sh=6445bbe767cc.
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IMGL MAGAZINE | APRIL 2023
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