$100 Million In Online Gambling Tax Revenue Is Great, But $1 Billion Is Better

Written By Martin Derbyshire on June 16, 2017 - Last Updated on November 24, 2021
pile of $100 bills

[toc]No matter how you slice it, $100 million is a lot of money. In fact, it’s the kind of money that is becoming harder for state lawmakers around the country to ignore.

The New Jersey online gambling industry posted another $21 million month this past May. Then PlayNJ Senior Analyst Robert DellaFave did the math. That $100 million figure is the one he believes the New Jersey online gambling industry has now paid in taxes since launching in November 2013. Actually though, his tally was $101.25 million in tax revenue over the past three and a half years.

In a press release highlighting the numbers, Dellafave explained:

“Even naysayers cannot deny the impact of New Jersey online gambling, which has now contributed more than $100 million to state coffers. New Jersey’s online gambling industry may be the state’s only new revenue stream to both generate more than $100 million in tax dollars and to do it without placing a heavy burden on citizens.”

Most states could use $100 million in tax revenue

One look at that $100 million figure should tell any state legislator considering legal and regulated online gambling all they need to know. The fact is, tax revenue from online gambling can pave a lot of roads. It can buy a lot of textbooks.  Tax revenue from online gambling can help improve public safety in a big way. If anything, it can simply balance a state’s books.

In New Jersey, the state is pouring the money back into Atlantic City. This is part of a rescue plan to pay down hundreds of millions of dollars in debt.

“Atlantic City is inundated with debt, but thanks to tax revenue contributions from online gambling, the beleaguered city stands a stronger chance of making a full recovery,” DellaFave said.

The list of American cities that can relate to this type of trouble is growing every day. The list of US state’s that could seriously use $100 million in additional tax revenue over the next three and half years is roughly all of them.

State’s including Pennsylvania, New York, and Michigan, are all considering some type of online gambling legislation. Even IL online gambling is being considered. Likely because these states know the time to get in on this source of tax revenue is now.

Ignoring the reality about online gambling in the US

There is some very vocal opposition to legal and regulated online gambling in America. They ignore improvements in security and technology, complaining online gambling sites are too easy for children to access. At the same time, they ignore the rights and freedoms of the average American. These people are trying to force the government to legislate what people can and can’t do with their hard-earned money in the privacy of their own home.

They’re doing their best to create some kind of nanny state. But what they fail to mention is how many people are gambling online already. And they’re doing it whether the state they live in is regulating it or not.

The federal government passed a law in 2006 making it difficult to get money on and off the dozens of offshore online gambling sites that welcome American players. Difficult, but not impossible. In fact, while its hard to track, it’s a good bet these offshore gambling sites have continued to pull in ten times the revenue from US players that the New Jersey online gambling industry has in the same three and half years since the market opened.

Using DellaFave’s math, that’s a potential $1 billion in tax revenue lost. And I thought $100 million was a hard number to ignore.

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Martin Derbyshire

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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