New Jersey Gambling Revenue: Where Does All the Money Go?

Avatar Updated on June 27, 2014
NJ Revenue Article Thumbnail

When you gamble, it’s a whole lot more likely that you’ll lose than win in the long run. Those are just the odds, no matter what you’re playing. But have you ever wondered where that money goes once it’s out of your hands? Who’s using it? Is it being won back by more fortunate players, or is it just going right to the casino owner’s pocket?

There’s more than one answer to all of these questions. Because gambling in New Jersey is state-sanctioned and supported, a large portion of the money goes back to the government and is used to fund public projects. Just how much of the money and which public projects depends on whether you lost it in a casino or in the New Jersey lottery.

Giving Back to New Jersey

In the 1970s, when New Jerseyans were polled about whether or not to allow legal casino gambling in the state, proponents heavily pushed how much such a move would benefit citizens in need of financial assistance. For any corruption or promotion of unhealthy behaviors that legal gambling would bring, it was difficult to ignore the many financial rewards that would also be gained.

ElderlyCasino lobbyists hammered this point home to the voting block that would benefit the most from state-sanctioned casino gambling — the senior citizens and the disabled. New Jersey voters weighed the bad against the good, and in 1961, the bill to create the New Jersey lottery was passed, followed by the bill to allow casino gambling in 1976.

It’s for the Elderly

In 1976, the Casino Control Act was enacted to create and regulate casinos in New Jersey. When it was passed, it stipulated that the new casinos be taxed at a rate of 15% of their total profit. The money raised by taxing casinos would then be put into the Casino Revenue Fund, which is used to offset utility, rental, telephone, and property tax costs for disabled and elderly New Jersey residents. Two years later, this tax rate was reduced to 8%.

The Casino Revenue Fund is managed by the Casino Control Commission, which in turn, falls under the jurisdiction of the Division of Gaming Enforcement. In the following decades, the group in charge of maintaining and administering the fund re-organized many times, but the group’s purpose remained the same: to ensure that state money raised by taxing Atlantic City’s casinos would reach the New Jersey residents who needed it.

In 1981, the Casino Control Act was again amended to further emphasize the focus of the Casino Revenue Fund, and in 1985, the Casino Revenue Fund Task Force was created. This was to combat misuse of the funds and ensure that they would reach the people who needed them, the people who might otherwise be without heat or shelter.

In 1992, the Casino Revenue Advisory Commission was created to study how the money would be best used and make recommendations for its future usage. This commission, unlike those before it, includes six members who directly receive assistance from the fund: three senior citizens and three people with disabilities. By 1998, the 8% tax on casinos was bringing in $300 million every year.

It’s For the Children

It isn’t only the casinos that generate income for our state’s public programs. That money you lost on a scratch-off isn’t completely a wash. When you lose money on the New Jersey lottery, you’re giving that money to our state’s public schools. 34.20% of your losses, in fact.

ChildrenThe New Jersey lottery is the fourth largest revenue producer in the state. Since its inception, the lottery has produced more than $22 billion dollars in revenue for New Jersey’s state and community colleges and universities, school nutrition program, Department of Human Services, the Marie Katzenbach School for the Deaf, and other public organizations.

It’s for Atlantic City

Casino parking fees are also redistributed to the community. In Atlantic City, $3.00 from every parking space’s fee is divided between the Casino Revenue Fund and the Casino Reinvestment Development Authority.

The Casino Reinvestment Development Authority is a commission that works to reinvest money earned through the casinos back into affordable housing for the people of Atlantic City. Since 1984, nearly $2 billion have been raised and redistributed this way.

And Of Course, It’s for the Winners

In the New Jersey lottery, most of the money raised is distributed back to winning players. 59.20% of it is returned this way, giving regular players an incentive to continue playing. This is the largest percentage of all the beneficiaries of the money raised by the New Jersey lottery.

Winners

Profits for Retailers and the Lottery Employees

Profits are far behind the winners and beneficiaries of the New Jersey lottery. At 5.6% of the total money raised, lottery retailers like liquor and convenience stores take their commission. Behind them are the people who actually make the lottery possible. This is the contractors and administrators, the people who are designing lottery games, advertising them to the people, and distributing the prizes. Their takeaway from the total money brought in is only 2.51%.

After paying their taxes, staff, and utilities, the money made by casinos goes right into their owners’ pockets. These profits are carefully documented by the Division of Gaming Enforcement and the records are available to view online.

It’s for Society

Taxes are an inevitable part of life. They supply the funding for society. Just like the New Jersey Division of Fish and Wildlife supports conservation efforts with money raised through the sale of hunting and fishing licenses and beach badge fees go toward lifeguards’ salaries and dune replenishment programs, the tax money raised from gambling in New Jersey is used to help support government programs.

Without these programs in place, the people of New Jersey would suffer from a significant lack of resources. When you gamble and directly support our public schools and assistance programs for the elderly and disabled, you’re taking an active role in building our society.

Privacy Policy