In our spotlight on business report tonight, some solid numbers coming into the state from online gaming this summer.

The total revenue for casinos and their online partners was nearly $250 million in July, which is almost 27% more than the same time last year.

Now those increases coincide with a tax increase on gaming revenues that just went into effect on July 1st.

Here to give us a little more information is our budget and finance writer, John Reitmeyer.

John, good to have you in the studio, as always.

Break down these numbers a little bit and what this 27% increase actually means for the casinos and their partners.

- Yeah, sure, and it's great to be with you today.

So it looks like it's been a good summer because even the June revenue figures were up month over, for the month, year over year, in just in June.

And what this means is the state taxes these activities.

And so the casinos and in the case of online gambling, because of the way the law was written over a decade ago when this activity became legal in New Jersey, the websites, when someone is playing a game, say on their phone or their laptop, that website is partnered, must partner with a brick and mortar casino.

And so the money that they're generating as a partnership, after they pay out whatever somebody wins when they play, is what they call the casino win, is then what gets taxed by the state, and that money comes into Trenton.

And so the activity this year, if we look at the last two months, the summer's been good, but really going back the whole year, the revenues have been really strong.

And it just so happens that Governor Murphy and lawmakers at the end of June decided to hike the tax on both online gambling in New Jersey and mobile sports betting in New Jersey.

And so now both of those taxes have been increased as we sort of see this increase in the gross revenues that are being won by the operators.

So break this down a little bit.

We know that there was the tax increase that you just said on these two things, the casino gambling and the mobile sports betting.

What was the tax rate?

What did it increase to?

Where did some lawmakers want it to be?

The original proposal from the governor was all the way up at 25%, and some lawmakers had discussed an even higher rate.

And so right now when it comes to the online gambling, that was a 15% tax rate.

Mobile sports betting was a 13% tax rate.

If you're in-person gambling, it's 8%.

And so where they landed for the online gambling and the mobile sports betting for both now is 19.75%.

And so that's generating, the projections are that that increase will generate about 200 million, a little more than 200 million more for the state on an annual basis.

So if we go back to that original proposal from Murphy, he had been seeking to get about $400 million more from these activities.

So that got sliced nearly in half in the final product.

That was all part of a bigger proposal for taxes that the governor had come up with, and that was incorporated into the state budget that was passed in late June.

So that's the budget that's now in effect across the state.

- I mean, $209 million, as I see it, is nothing to sneeze at.

These are significant revenues coming into the state on a platform that was untaxed, that was really done behind the scenes in the streets, on the black market, so to speak.

Where is this money actually going in terms of state revenue, in terms of how it's being used in the budget?

Yeah, and so we should put it in context.

New Jersey has a nearly $60 billion annual budget, and when we talk about the money that comes in from these taxes, it's less than a billion.

So it's a lot of money, but it's a relatively small amount with the overall state budget.

But as we've learned, every dollar counts when it comes to state funding and state programs.

And so this specifically, a lot of the casino revenue pays for what's called the Casino Revenue Fund that funds a lot of things like senior services.

And so there was this idea when gambling was legalized in New Jersey that these revenues be dedicated to maybe more virtuous purposes than some of the general spending.

And so a lot of this uptick would be funding the Casino Revenue Fund.

Are we seeing any correlation between an increase in the online gaming and a decrease in in-person betting and gambling?

Well, that's a really interesting question and something that's closely watched by the analysts and what we've seen at least headed into this year so far amid this uptick that we're seeing kind of by people online, it doesn't seem to be eroding the brick and mortar casino wind.

So when we talk about the year to date as a whole, we're looking at about $1.6 billion for online gambling and more than that, closer to $1.7 billion for brick and mortar.

So it's helping, but it doesn't appear to be eroding at least year to date.

Yeah, a whole lot more we could dive into, but you did that for us.

You can see more of John's reporting on our website, njspotlightnews.org.

John, great to talk to you as always.

Thank you.

You're welcome.

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Presenting the Jersey City Latin Jazz Festival, September 5th through 6th.

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