States across the country are doubling down on online sports betting companies like DraftKings and FanDuel, as they seek to boost their tax revenues in the wake of the COVID-19 pandemic. With brick-and-mortar casinos shuttered and traditional sports leagues on hold, many states are turning to online sports betting as a way to fill their depleted coffers.
In New Jersey, where online sports betting has been legal since 2018, Governor Phil Murphy recently signed a bill that raised the tax rate on online sports betting revenue from 8.5% to 13%. This increase is expected to generate an additional $20 million in annual tax revenue for the state.
Other states are following suit, with Pennsylvania and Indiana also considering raising the tax rate on online sports betting companies. In Pennsylvania, lawmakers are debating a proposal that would increase the tax rate on online sports betting revenue from 36% to 41%. This increase could bring in an additional $40 million in annual tax revenue for the state.
Meanwhile, in Indiana, lawmakers are considering a bill that would increase the tax rate on online sports betting revenue from 9.5% to 15%. This increase could generate an additional $10 million in annual tax revenue for the state.
States are betting that increasing the tax rate on online sports betting companies will help offset the revenue losses from the pandemic and provide much-needed funding for essential services. Critics, however, argue that higher tax rates could drive online sports betting companies out of the market or discourage them from investing in the state.
Despite the potential risks, states are moving forward with their plans to boost taxes on online sports betting companies. With the industry booming and demand for online sports betting at an all-time high, states are eager to cash in on this lucrative revenue stream. As the pandemic continues to wreak havoc on state budgets, betting on online sports betting companies may be just the ticket states need to hit the jackpot.