New Jersey appears to be paving the way for states to generate more tax revenue from sports betting.
Last week, New Jersey Governor Chris Christie signed into law a bill that imposes a 10.5 percent tax on winnings for companies that operate daily fantasy sports leagues. The New Jersey legislature estimates that the bill will produce an annual net revenue gain of at least $5.8 million. The legislation also requires fantasy sports game providers to acquire a permit from the state’s Department of Consumer Affairs, and sets up penalties for providers who fail to abide by the law’s requirements.
According to a study by Ipsos Public Affairs, 57.4 million players engage in fantasy sports leagues in the U.S. and Canada, with 1.5 million players in the State of New Jersey alone.
NJ.com covers the story:
In 2015, during a Republican presidential primary debate, Christie rejected out of hand the idea of regulating fantasy sports.
“Are we really talking about getting the government involved in fantasy football?” Christie asked. “Wait a second. We have $19 trillion in debt, we have people out of work, we have ISIS and al Qaeda attacking us — and we’re talking about fantasy football? Can we stop?” …
On Thursday, Marc LaVorgna, a spokesperson for [fantasy sports operators] DraftKings and FanDuel, praised Christie for “protecting fantasy sports fans and guaranteeing their right to play the games they love, while establishing rules to protect consumers as the industry grows and ensure the continued integrity of fantasy sports contests.”
Last January, Maryland Comptroller Peter Franchot promulgated regulations requiring, among other things, that fantasy sports operators file certain information with his office, and limit participants to a maximum of $1,000 in deposits per month under most circumstances. The regulations were authorized under a bill passed by the General Assembly in 2012 specifically exempting fantasy sports betting from the state’s general gambling prohibitions.
In June, the U.S. Supreme Court announced that it will hear a New Jersey case challenging the constitutionality of a federal statute preempting most states from authorizing sports betting.