Illinois Sportsbook Tax Hits DraftKings, FanDuel, Sector

Illinois lawmakers have passed a new state budget that introduces a tiered tax on online sports wagers, charging 25 cents per bet for the first 20 million wagers and 50 cents per bet thereafter. This tax is expected to raise effective rates for major operators like DraftKings and FanDuel, whose parent company is Flutter Entertainment, to over 50%. Analysts estimate the measure could cost DraftKings $68–$70 million in additional taxes annually and have a $70–$80 million impact on its EBITDA, with companies likely to reduce promotions to offset costs. The tax hike also led to share price declines for other sector players such as MGM Resorts and Penn Entertainment, though smaller competitors are expected to be less affected. Industry groups have criticized the tax as discriminatory, pledged to oppose it, and warned that Illinois' move may prompt other states to consider similar measures. This marks the second consecutive year Illinois has raised taxes on sports betting.