In our spotlight on Business Report tonight, the battle is on for a budget proposal to hike taxes on in-person and online betting.

The tax increases would raise hundreds of millions of dollars for the state at a time when finances are tightening and federal funding could be shrinking.

But casino groups argue higher taxes would force job losses and potential closures to offset lost revenue.

Raven Santana spoke with two lawmakers about what the state stands to gain by raising those taxes and the potential impact on Atlantic City's economy.

Since 2021, all of our legislative leaders in both houses have talked about affordability in New Jersey.

I don't think it makes sense for this state, especially after we've heard all the talk about affordability.

Senator Vince Palestina says a proposal to increase taxes on both gambling and online sports betting wouldn't just hurt the industry.

But Atlantic City specifically.

Reason why we have lower tax rates in Atlantic City has always been because it spurs investment when they pay lower taxes to the state.

You know, it allows them to invest in their properties.

And we have seen a significant investment in some of the servers and some of the things necessary for online gaming.

This would hamper.

That.

Right now, the tax on sports betting sits at 13% and the online casino tax rate is 15%.

In his budget proposal, Governor Murphy seeks to raise both taxes to 25%.

The plan is projected to generate an additional $400 million in revenue for the state's casino revenue fund and the budget's general fund.

But at the end of the day, this isn't going to cost a citizen anything.

You know, obviously only if you win.

Do you pay taxes on your earnings.

But this is coming also.

You know, what has been, you know, continued record profits from this industry.

A similar bill introduced last April by Senator John McKeon, which sought to raise the tax rate to 30%, has remained untouched in committee.

McKeon says Jersey is due to raise its taxes.

By comparing our rate, which goes back to 2018.

So it hasn't changed since then.

So that you know the state.

The obvious one is that seven years at this point that it's had stayed the same.

So looking at our number of the of the percentage compared to Pennsylvania, Pennsylvania for sports gaming is 36% for online gambling is 54%.

New York is for is is 30% for sports and 37% as it relates for online gaming.

So I mean, we are way, way below any of the states in our area right now.

In-person gaming in the casinos in New Jersey and actually across the country is relatively flat in New Jersey is actually down slightly in 2020 for the Internet, gaming and sports betting.

They are the highest growth industry segments of the industry.

So the Atlantic City casinos are counting on that revenue to compete with the looming New York casinos that are on the horizon.

Mark Antonio, president of the Casino Association of New Jersey, issued the following statement opposing the Murphy administration's proposal to raise online gaming tax.

The proposed tax increase for online gaming will threaten the stability of Atlantic City's gaming and tourism industry, as well as the industry's workforce.

He argues higher taxes will force players back to illegal betting, saying a consumer shift back to the unregulated operators will not only lead to increase untaxed wagering, but will also result in individuals playing in an unregulated environment that does not offer the same protections for consumers that are licensed to online gaming partners provide.

Industry wants to say that, yes, this extra tax is in play.

Then they'll have to tweak their odds in some way.

That's going to send gamblers to the illegal market.

That's nonsense.

You know, 90% of the kids that gamble today wouldn't know where to find a way.

And it's day is still facing many challenges from a tourism and brick and mortar perspective.

The city needs some assistance.

And the one thing that has been going well has been online gaming and sports betting over the last few years.

And this is not the time when we had New York gaming on the horizon to add any additional burdens or any additional taxes to the industry.

Lawmakers now have a June 30th deadline to pass a budget friendly spotlight.

News.

I'm Raven Santana.