February 13, 2019 | Posted in:

2018 New Jersey Sports Wagering Statistics

When New Jersey legalized sports betting, they had expected tax revenue of $13 million by the end of the year. In the grand scheme of their budget woes, that is not a big impact, however it would be a start. As December came to a close, the first year was officially in the books, but only brought in $10.4M over the course of 2018.

Although 2019 will bring a full year of opportunity for bets to be placed, states across the country are working to pass legislation that will legalize sports betting and ultimately increase the competition for New Jersey. Neighboring states with casinos, such as Pennsylvania and New York, are expected to also legalize sports betting and take a portion of revenue away from New Jersey once again. While it can be easy to argue that the experience of being in the casino sportsbook and watching games in real time draws a crowd, looking at the impressive revenue data, it’s no question that internet gaming is going to be key for competition.

State Tax Revenue from Sports Wagering

When looking at the numbers (above), it’s not a surprise that football is the sport with the heaviest amount of wagers. In comparing the casinos, Resorts Digital had the largest contribution to New Jersey’s tax revenue of $3,955,856, while the physical sportsbook in Resorts only brought in $55,888. The primary reason that Resorts raised so much tax revenue, despite only opening their own online sportsbook two days before Super Bowl LVIII, is due to a partnership with BetStars and DraftKings. The second highest internet sports tax revenue location is Meadowlands, which partners with FanDuel.

Impact on Individual Taxes

More important than the revenue generated and collected by the state will be the income tax impact on taxpayers. Prior to the Tax Cuts & Jobs Act, gambling losses could easily be taken against winnings on your federal tax return when managed to itemize your deductions. With the new law, an increase in taxpayers will not itemize and instead take the standard deduction. Although it may sound bad, since the standard deduction has increased to $24,000 for taxpayers married filing jointly, there may not be a big impact on whether or not you take your losses. New Jersey tax law has not changed for gambling losses, so you can continue to offset winnings with no limitation.

As with all tax deductions, it is important that taxpayers be able to substantiate gambling losses that are used to offset winnings. If under audit, the burden of proof will be on the taxpayer and should no information be available, the losses can easily be disallowed.




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Chris provides accounting, tax planning, and consulting services to professional athletes, family entertainment centers, and other businesses in the amusement and hospitality industry. He also aids clients in implementing cloud accounting solutions.
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