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DraftKings and Flutter stocks plunge after Illinois proposes tax hike

Yesterday (May 28), Illinois proposed a gambling tax increase, causing the stock prices of both DraftKings and Flutter Entertainment to fall.

Illinois lawmakers discussed the increase during their 2025 budget session over the weekend, but it has not yet been formally approved.

The impact of rate hikes is being felt faster than people realize, and the share prices of large operating companies have already been hit.

Flutter closed yesterday at $188.33, 7.7% below its final price on Friday night before the Memorial Day weekend.

DraftKings saw a similar decline, closing at $36.61 on Tuesday. That was down 10.2% from Friday afternoon.

The big tax increase means DraftKings and Flutter Entertainment will qualify for the highest payment tiers.

Flutter Entertainment is an international sports betting and gambling company that owns FanDuel.

Illinois’ proposed tax increase and its impact on operators

Late Sunday night (May 26), senators passed a fiscal year 2025 budget that includes a sports betting tax increase, making Illinois the second-most expensive state for gaming operators to do business.

Operators with the highest adjusted gross revenue will be subject to a 40% tax, and even smaller operators will be subject to a higher rate of 20%. The standard rate is 15% and has been in effect since sportsbooks went live in June 2021.

All corporations with annual adjusted gross income of $30 million or more are subject to a 20% tax, while corporations with annual adjusted gross income of more than $200 million are subject to a 40% tax.

It also includes other restrictions, all of which are significantly higher than what sportsbooks currently pay.

The Sports Betting Alliance (SBA) set up a “No Tax Increase in Illinois” page on its website, urging people to tell lawmakers there should be no new taxes.

Explaining why this is important, they said: “The more taxes there are, the worse the odds will be for players. Customers will receive fewer promotions and bonuses. Higher taxes will increase illegal offshore sports betting.”

Featured Image: Photo by Joel Mott on Unsplash

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