The total revenue for Atlantic City casinos and their online partners was nearly $250 million in July, nearly 27% more than the total revenue for the same month last year. The increase coincides with a tax increase on online gambling that took effect on July 1.

John Reitmeyer, NJ Spotlight News’ budget and finance writer, discusses the revenue numbers and the recent changes that contributed to those numbers. This interview has been excerpted and lightly edited.

Joanna Gagis, senior correspondent: Break down these numbers a little bit and what this 27% increase actually means for the casinos and their partners.

John Reitmeyer: So it looks like it’s been a good summer because even the June revenue figures were up for the month, year over year. 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 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.

If we look at the last two months, the summer has 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. 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.

JG: What was the tax rate? What did it increase to? Where did some lawmakers want it to be?

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

The projections are that that increase will generate about a little more than $200 million [extra] for the state on an annual basis. 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. That’s the budget that’s now in effect across the state.

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

JR: 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. It’s a lot of money, but it’s a relatively small amount within the overall state budget. But as we’ve learned, every dollar counts when it comes to state funding and state programs.

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

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

JR: 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 … it doesn’t seem to be eroding the brick-and-mortar casino wins. 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.