DraftKings and Flutter shares fall after Illinois Senate approves tax hike

DraftKings and Flutter shares fall after Illinois Senate approves tax hike

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DraftKings and Flutter shares fall after Illinois Senate approves tax hike

DraftKings and Flutter shares went down on Tuesday after the Illinois Senate approved a budget that nearly tripled the state’s tax rate on regulated sportsbooks.

On the first trading day following the budget increase, DraftKings sank nearly 12%, while Flutter, the parent company of FanDuel, dropped 6.6%. If Governor J.B. Pritzker signs the budget, the new progressive tax will go into effect on July 1, with top revenue operators paying as much as forty percent and smaller enterprises paying twenty percent, up from the current fifteen percent.

Earlier this year, Pritzker advocated hiking the sports betting tax to thirty-five percent. At forty percent, Illinois would have the second-highest sports betting tax in the U.S., behind only Delaware, New Hampshire, New York, and Rhode Island, which tax at fifty-one percent.

The Sports Betting Alliance (SBA) cautioned that the higher levy could lead to inferior odds and products for bettors, driving business to unregulated offshore sportsbooks. 

SBA President Jeremy Kudon commented:

“Rather than heeding the cry from tens of thousands of residents who vocally opposed more than doubling sports betting taxes, the Illinois Senate advanced a budget that would make the Illinois sports betting tax the second-highest in the country and counterproductively penalizes sports betting operators who invested millions into local economy and created jobs in the state.”

According to BTIG research, DraftKings and Flutter will be subject to thirty-six percent and thirty-seven percent tax rates in Illinois under the new rules.

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