DraftKings and Flutter stocks drop as Illinois hikes sports betting tax

DraftKings fell as much as 10 per cent.

US.- DraftKings and FanDuel-owner Flutter Entertainment fell on Tuesday after the Illinois Senate passed legislation that would raise taxes on sports betting. DraftKings fell as much as 10 per cent, the most since August, and US shares of Flutter were down by as much as 5.6 per cent.

Rush Street Interactive stock was unchanged and shares of Penn Entertainment were down by as much as 1.6 per cent. Under the proposal, they would pay a lower tax rate than DraftKings based on their current market share.

The Illinois bill would change sports gambling tax, which is currently 15 per cent, to a new graduated format that would be as high as 40 per cent on the adjusted gross revenue of sports gaming companies. The legislation, part of the Illinois budget package, had head to the state’s House.

The Sports Betting Alliance believes the proposed measures “will cause real harm”. SBA president Jeremy Kudon said: “Rather than heeding the outcry from tens of thousands of residents who vocally opposed more than doubling sports betting taxes, the Illinois Senate advanced a budget tonight that would make Illinois sports betting tax the second highest in the country and counter-productively penalises sports betting operators who invested millions into the local economy and created jobs in the state.”