Shares of Flutter Entertainment, owner of DraftKings and FanDuel, fell on Tuesday after Illinois senators passed a new budget that included tax increases on sports betting operators.
According to industry news site iGamingBusiness, the new tax increase will make Illinois the second-most expensive state for online sports betting companies to operate in, behind New York. Under the progressive tax system, companies with the highest adjusted gross income will pay a 40% tax.
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Shares of Flutter Entertainment, owner of DraftKings and FanDuel, fell on Tuesday after Illinois senators passed a new budget that included tax increases on sports betting operators.
According to industry news site iGamingBusiness, the new tax increase will make Illinois the second-most expensive state for online sports betting companies to operate in, behind New York. Under the progressive tax system, companies with the highest adjusted gross income will pay a 40% tax.
DraftKings and Flutter are the two largest sports betting companies in the country, so the tax rate would affect them the most, while smaller operators like Penn Entertainment would be hit less hard.
Flutter declined to comment on the news, and DraftKings did not immediately respond. Barons Request for comment. However, the Sports Betting Association ( An industry group made up of FanDuel, DraftKings, BetMGM and Fanatics has set up a tab on its website encouraging Illinois residents to send emails to their local lawmakers in protest of the tax increase.
DraftKings shares fell 7% to $37.94 in premarket trading Tuesday, while Flutter shares fell 4.3% to $195.25.
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Needham analyst Bernie McTernan, who has a buy recommendation on DraftKings with a $60 price target, wrote in a research note on Tuesday that he expects “concerns over rising tax rates will be a bigger concern for investors across the board.”
Contact Angela Palumbo at angela.palumbo@dowjones.com.
