The New Jersey election will decide who becomes governor while determining the future path of the state's profitable gaming sector, which currently faces strong political oversight. Atlantic City’s casinos, the rapid rise of online gambling, and looming tax policy changes are all on the table. The sector will follow either expansion and transformation or collapse based on decisions made during the next four years.
Two very different candidates were in the spotlight: Democrat Mikie Sherrill and Republican Jack Ciattarelli. Sherrill defends worker protection through her support for casino workplace standards and her opposition to smoking within gaming facilities. Ciattarelli supports different policies than Murphy because he supports minimal regulations, while warning that strict rules will harm New Jersey businesses since New York and Pennsylvania are rapidly expanding their gaming industries. The discussion about this matter extends its influence across different political affiliations. The state needs to determine its level of intervention when dealing with the quick development of this industry.
The gaming sector of New Jersey depends on Atlantic City as its economic and symbolic center, although its control over the market continues to weaken. The competition has evolved from being limited to specific regions because it now operates on a global scale. Offshore online casinos operate under foreign jurisdictional licenses and now directly serve international players. Some platforms even skip traditional sign-up steps, with casinos with no account systems successfully in place. These platforms allow users to verify their identity through banking details or a crypto wallet address and start playing instantly. The absence of physical operations creates an enforcement and tax problem for New Jersey regulators because they need to handle businesses that operate without physical presence yet affect the local market.
The city faces additional challenges because of unbalanced funding, economic recessions, and rising competition from surrounding states. The upcoming New York City casino license approvals will create a direct challenge by attracting both gamblers and investors from the region. Atlantic City used to be known as the "Las Vegas of the East," but it now fights to maintain its position instead of growing its reputation.
The current situation has brought back the discussion about whether New Jersey should allow casino operations to move outside of Atlantic City. Proposals to open new casinos in the Meadowlands, Monmouth Park, or elsewhere have floated through Trenton for years. Ciattarelli maintains that the state needs to take immediate action because delay is not feasible. He backs Atlantic City tourism growth through new entertainment spaces and conference facilities to create economic growth throughout the entire region. The longer New Jersey delays, he warns, the harder it will be to catch up.
Tax regulations are another pain point. Right now, online gambling and sports betting operators pay higher tax rates than physical casinos. The current system encounters resistance from land-based operators who want equal treatment, but online platforms argue it restricts their investment potential.
Outgoing Governor Murphy backed higher online tax rates at 25% but the legislature capped the final rate at 19.75%. With Mikie Sherrill now elected, there’s renewed expectation that the issue could resurface. While she hasn’t introduced a formal proposal, a Democratic administration makes a hike more likely than it would have been under Republican leadership.
The federal government has announced an upcoming system transformation that will affect all parts of the system. The IRS will introduce a new rule starting in 2026 that restricts taxpayers from claiming more than 90% of their total gambling losses as deductions. The tax system requires both recreational and professional gamblers to pay higher taxes regardless of their ability to achieve a break-even point. The change would lead to different player actions while decreasing high-risk wagers, which would create a chain reaction that affects operator revenue. The gaming industry faces difficulties because state and federal regulations have become stricter, which forces operators to spend more money on compliance and licensing fees.
Labor also remains a critical factor. The New Jersey political environment depends heavily on Casino unions because they supported Sherrill to protect jobs and defend workplace rules. The business community and industry leaders backed Ciattarelli because they sought to achieve operational freedom that exceeds current regulatory boundaries. It's a clear divide: prioritize job security and strong oversight, or enable faster economic growth through deregulation.
The competition has become more intense throughout the entire country. New York and Pennsylvania have dedicated substantial funds to develop their land-based and online gambling operations. Atlantic City has lost its status as the East Coast’s gaming capital. Foot traffic is down. Online casino gaming is increasing. New Jersey needs to maintain its aggressive stance because otherwise it will lose its position as a leader in the industry, which it originally created.
But it doesn’t end there. In 2024, land-based gaming revenue in Atlantic City declined by 1.1% from the previous year. Throughout early 2025, monthly figures showed little momentum. Meanwhile, online casinos grew by 24% in 2024, with that trend continuing into this year. Sports betting has also exploded, with billions in wagers and surging taxable earnings. As a result, online regulation is now a centerpiece in New Jersey’s political playbook. Both candidates acknowledged its importance, but disagreed on where regulation ends and overreach begins.
Beyond the revenue, New Jersey’s legacy is also at stake. It was the first state outside Nevada to legalize casinos, and one of the earliest to fully embrace online gambling. That reputation brought national visibility, but it also raised expectations. The next administration’s policies will decide whether New Jersey keeps that leadership role or fades behind more aggressive competitors.
Gaming is a critical part of the state’s budget. Raise taxes too high, and businesses leave. Deregulate too fast, and oversight collapses. Wait too long to expand, and the state cedes the market. The margin for error is thin, and the clock is ticking. In the months following the election, the legislature will take its cues from the new governor.
