New Jersey lawmakers have inched closer to taxing prediction markets, with a revised bill that would slap a 9% levy on gross income from event contracts. It’s a more pragmatic approach than earlier versions, basically handing regulatory authority to federal overseers while the state pockets revenue from a rapidly expanding sector.

A Softer Touch Than Originally Planned

Senate Bill S4447 scraped through the Budget and Appropriations Committee on a 9-4 vote. Progress, sure, but only after earlier versions took flak for being overly restrictive. The original proposal wanted to establish a state licensing regime and impose tighter controls on which events you could wager on, plus a higher tax rate.

The amendments represent a significant retreat. Rather than building a parallel regulatory framework, the revised bill accepts the Commodity Futures Trading Commission as the primary regulator while letting the state grab the cash. It’s pragmatic, middle ground between leaving money on the table and overreach.

Revenue Projections Point to Eight Figures

The Office of Legislative Services reckons S4447 would generate between $10.3 million and $15.3 million annually, assuming prediction market operators report financials transparently. That’s real money from a sector that doesn’t yet report state-level data consistently.

The amended version also ditched a provision requiring self-exclusion tools comparable to those in traditional gaming. That concession likely helped passage, though it may draw heat from harm-reduction advocates.

Microbetting and Player Safety in Focus

New Jersey’s appetite for betting regulation stretches beyond prediction markets. A separate bill to restrict online microbetting has advanced through committee and now heads to a full Assembly vote. Pass it, and microbetting gets confined to physical casinos and racetracks, a direct response to concerns about rapid-fire, low-stakes wagers.

Meanwhile, the Major League Baseball Players Association has been lobbying lawmakers to ban individual player prop bets, citing athlete harassment tied to losing wagers. These efforts in tandem suggest regulators want to capture emerging betting categories without losing their grip on player safety narratives.