TLDR New Jersey Senate and Assembly committees approved companion bills placing a 9% surtax on prediction market operators. The Senate voted 9-4 and the Assembly voted 10-4, sending the bills to second reading. The new version drops an earlier plan for a 29.75% tax rate and a licensing system. The state expects the tax to bring in $10.3 million to $15.3 million in fiscal year 2027. New Jersey’s Attorney General is asking the Supreme Court for more time to challenge a ruling that favored Kalshi.
New Jersey lawmakers took a step toward taxing prediction market platforms this week. On June 28, two legislative committees approved companion bills aimed at these operators.
The Senate Budget and Appropriations Committee passed Senate Bill 4447. The Assembly Budget Committee passed a matching bill, Assembly Bill 5336.
Both votes came with committee substitutes, meaning the bills were rewritten before passing. The Senate vote was 9-4, and the Assembly vote was 10-4.
The bills now head to a second reading in each chamber. That is the next step before a full floor vote.
The core of the plan is a 9% surtax on gross income earned by prediction market platforms each tax year. This would apply on top of existing state corporation and income taxes.
Senate Budget Chairman Paul Sarlo called the measure a “first step” toward regulating this industry. He said the goal is to bring these platforms in line with rules that already apply to sportsbooks.
The Office of Legislative Services estimates the tax could raise between $10.3 million and $15.3 million for the state in fiscal year 2027.
A Bill Scaled Back From Its Original Form
The bills passed this week look very different from their first drafts. Lawmakers removed most of the tougher rules that were in the original