New Jersey has enacted significant changes to its online gambling regulations, introducing a statewide ban on sweepstakes casinos and increasing tax rates for iGaming operators.
The new measures, signed into law at the end of June 2025, are part of a broader effort to tighten oversight of the digital gambling sector and boost state revenue.
The legislation prohibits all forms of sweepstakes casinos from operating in New Jersey. These platforms, which allow players to purchase virtual currency and redeem winnings for cash or prizes, have become increasingly popular across the United States.
However, lawmakers have raised concerns about their regulatory status and consumer protections. The ban is effective immediately, with enforcement actions expected to follow against any operators that continue to target New Jersey residents.
Sports Betting Tax Increased in New Jersey
In addition to the sweepstakes ban, the new law increases the tax rate on online casino and poker revenues from 15% to 18%.
The tax on online sports betting revenue has also been raised, moving from 13% to 16%. These changes are projected to generate millions of dollars in additional annual revenue for the state, which has one of the largest and most mature iGaming markets in the country.
The move comes as New Jersey continues to lead the nation in online gambling innovation and regulation. Since launching legal iGaming in 2013, the state has consistently ranked among the top markets for online casino and sports betting revenue.
The new tax rates bring New Jersey closer in line with other states that have recently increased iGaming taxes, such as Pennsylvania and Michigan.
Industry stakeholders are closely monitoring the impact of these changes, particularly the sweepstakes ban, which could affect both operators and players who have come to rely on these platforms as an alternative to traditional online casinos.
The state’s Division of Gaming Enforcement is expected to provide further guidance on compliance and enforcement in the coming weeks.
As the legal landscape for online gambling continues to evolve, New Jersey’s latest actions underscore the state’s commitment to maintaining a regulated, responsible, and profitable digital gaming environment.
The combination of higher taxes and stricter controls is likely to shape the future of the industry in New Jersey and influence regulatory trends in other states.
