LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 2172
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: FEBRUARY 28, 2025
SUMMARY
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Synopsis: |
Includes electronic sports event as sports wagering; authorizes electronic sports wagering at certain locations. |
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Type of Impact: |
Annual State and local revenue increases; annual revenue increase for Casino Reinvestment Development Authority. |
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Agencies Affected: |
Division of Gaming Enforcement in the Department of Law and Public Safety; Department of the Treasury; Casino Reinvestment Development Authority; certain local government units. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Annual |
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State Revenue Increase |
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Indeterminate |
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Authority Revenue Increase |
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Indeterminate |
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Local Revenue Increase |
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Indeterminate |
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· The Office of Legislative Services (OLS) estimates that this bill will increase annual sports wagering revenues to the State, to the Casino Reinvestment Development Authority, and to certain units of local government by an indeterminate amount following the bill’s enactment.
· The OLS does not have the data to know how many on-site or Internet electronic sports events sports wagering licensees intend to offer, the number of in-person and Internet wagers that would be placed at such events, or the total amount of revenue that would be generated from such events.
BILL DESCRIPTION
This bill would enable the Department of Law and Public Safety’s Division of Gaming Enforcement to permit sports wagering licensees to host electronic sports events in sports wagering lounges or online in conjunction with Internet sports wagering operators, given certain conditions. The division may also permit competitors to place wagers on themselves and their teams, given certain conditions. Under the bill, licensees may offer up to two websites and corresponding mobile applications exclusively dedicated to wagering on electronic sports events. With division approval and satisfaction of certain criteria, licensees may also act as the exclusive operators for wagering, accepting wagers and providing payouts to competitors.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that this bill will increase annual sports wagering revenues to the State, to the Casino Reinvestment Development Authority, and to certain units of local government by an indeterminate amount following the bill’s enactment. The OLS does not have the data to know how many on-site or Internet electronic sports events sports wagering licensees intend to offer, the number of in-person and Internet wagers that would be placed at such events, or the total amount of revenue that would be generated from such events.
Under current law, various tax rates apply to gross revenues generated by casinos and racetracks in this State from all sports wagering, gross revenues from on-site sports wagering, and gross revenues from online sports wagering. The Department of the Treasury distributes tax revenues generated from casinos to the State’s Casino Revenue Fund (8.5 percent tax for in-person sports wagering and 13 percent tax for Internet sports wagering) and to the fund for the Casino Reinvestment Development Authority (1.25 percent tax). The Department of the Treasury distributes tax revenues generated from racetracks to the State General Fund (8.5 percent tax for in-person sports wagering and 13 percent tax for Internet sports wagering) and to funds for certain units of local government that host racetrack facilities (1.25 percent tax).
For informational purposes, the OLS notes that according to the Division of Gaming Enforcement’s December 2024 Gaming Revenue Results press release, sports wagering gross revenue reported by casinos and racetracks totaled $1.095 billion for calendar year 2024, resulting in tax revenues of $141.2 million to the State, $6.2 million to the Casino Reinvestment Development Authority, and $7.5 million to certain local governments.
As noted above, the OLS does not have the information to provide an exact estimate of the increase in sports wagering revenues that will result from the bill’s provisions. However, as illustrated in the table below, if wagering on electronic sports events increased annualized tax revenues by one percent, five percent, or 10 percent above current levels, the following increases in annualized tax revenues would be realized, holding other factors constant.
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Hypothetical Impact of Electronic Sports Event Wagering Using Calendar Year 2024 Tax Revenues from Sports Wagering |
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Entity |
Sports Wagering Revenue Stream |
Annualized Tax Revenues for 2024 |
Hypothetical Revenue Increases |
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1% Increase |
5% Increase |
10% Increase |
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Casino Reinvestment Development Authority |
Gross Sports Wagering Revenue from Casinos (1.25% tax) |
$6,162,271 |
$61,623 |
$308,114 |
$616,227 |
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Certain Local Governments |
Gross Sports Wagering Revenue from Racetracks (1.25% tax) |
$7,520,608 |
$75,206 |
$376,030 |
$752,061 |
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Subtotal |
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$13,682,879 |
$136,829 |
$684,144 |
$1,368,288 |
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State Revenue |
On-Site Sports Wagering Revenue (8.5% tax) |
$2,872,689 |
$28,727 |
$143,634 |
$287,269 |
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Internet Sports Wagering Revenue (13% tax) |
$138,345,790 |
$1,383,458 |
$6,917,290 |
$13,834,579 |
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Subtotal |
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$141,218,479 |
$1,412,185 |
$7,060,924 |
$14,121,848 |
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Section: |
State Government |
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Analyst: |
Associate Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).