{"id":242,"date":"2024-06-26T01:20:46","date_gmt":"2024-06-25T22:20:46","guid":{"rendered":"https:\/\/diamondreelsnodepositbonus.icu\/2024\/06\/26\/illinois-gambling-tax-hike-sends-draftkings-and-flutter-stocks-plunging\/"},"modified":"2024-06-26T01:20:46","modified_gmt":"2024-06-25T22:20:46","slug":"illinois-gambling-tax-hike-sends-draftkings-and-flutter-stocks-plunging","status":"publish","type":"post","link":"https:\/\/diamondreelsnodepositbonus.icu\/2024\/06\/26\/illinois-gambling-tax-hike-sends-draftkings-and-flutter-stocks-plunging\/","title":{"rendered":"Illinois Gambling Tax Hike Sends DraftKings and Flutter Stocks Plunging"},"content":{"rendered":"<p><iframe loading=\"lazy\" width=\"800\" height=\"450\"\n    src=\"https:\/\/www.youtube.com\/embed\/9tGOALJbaiA\"\n    frameborder=\"0\"\n    allow=\"accelerometer; encrypted-media; gyroscope; picture-in-picture\"\n    allowfullscreen><br \/>\n<\/iframe><\/p>\n<p>DraftKings and Flutter Entertainment, the parent company of FanDuel, experienced a decline in their stock values on Tuesday, May 28th, due to a negative response from the US market to a proposed increase in Illinois&#8217;s gambling levy.<\/p>\n<p>The proposed plan would implement a graduated betting tax structure, replacing the current fixed 15% rate. This would set the tax rate between 20% and 40% based on each operator&#8217;s adjusted gross earnings (AGR). <\/p>\n<p>Licensed operators with an annual AGR of $30 million (\u00a323.5 million\/\u20ac27.6 million) would pay a 20% tax rate. Nevertheless, if an operator reports earnings exceeding $200 million, they would face a 40% tax rate &#8211; a 167% increase from the current rate. This would be the second highest tax rate in the US, trailing behind New York&#8217;s 51%.<\/p>\n<p>Other thresholds include: a 25% tax rate for AGR between $30 million and $50 million, a 30% tax rate for AGR between $50 million and $100 million, a 35% tax rate for AGR between $100 million and $200 million.<\/p>\n<p>Significant operators like DraftKings and FanDuel would be subject to the highest tax rate in Illinois. <\/p>\n<p>While the plan is still awaiting approval, the proposed tax hike significantly affected operators during Tuesday&#8217;s trading session, as the US market was closed on Monday for Memorial Day.<\/p>\n<p>DraftKings and Flutter experienced a decline in their share prices at the market close.<br \/>\nThe influence of these proposals was immediately evident on DraftKings and Flutter, both of which have substantial operations in Illinois, upon the market&#8217;s opening yesterday.<\/p>\n<p>Beginning with Flutter, which concluded trading at $204.11 before the weekend, its stock price plummeted to $196.64 within a half-hour of yesterday&#8217;s opening, representing a 3.7% decrease.<\/p>\n<p>Flutter&#8217;s share price continued its downward trajectory throughout the day, ultimately closing at $188.33 in the US. This marked a 7.7% decline compared to its closing price on Friday evening preceding the extended weekend.<\/p>\n<p>Regarding long-standing competitor DraftKings, the trading pattern on Tuesday mirrored this trend. DraftKings closed at $40.75 last week, but within an hour of opening on Tuesday, its share price fell by 12.0% to $35.88.<\/p>\n<p>DraftKings did experience a partial recovery during the remainder of the day. Nevertheless, its closing price of $36.61 was still 10.2% lower than Friday afternoon.<\/p>\n<p>What is the opinion of analysts regarding the Illinois tax proposal?<br \/>\nTruist analysts responded to the market movement and the proposed tax increase, stating that the operators&#8217; response remains uncertain. However, analysts did outline the impact of a higher tax rate on existing Illinois licensees.<\/p>\n<p>Based on fiscal year 2023 data, both FanDuel and DraftKings fall into the 40% tax bracket. <\/p>\n<p>FanDuels modified total income was $480 million, with an extra $102 million in levies, while DraftKings&#8217; modified total income was $312 million, with an extra $78 million in levies.<\/p>\n<p>As for other operators in the state, the effect of the tax hike is less significant, but still noticeable. Rush Street Interactive&#8217;s tax rate is 30%, meaning an extra $12 million will be paid on the $82 million in modified total income reported in fiscal year 2023. BetMGM (modified total income of $43 million), Penn Entertainment (modified total income of $38 million), and Caesars (modified total income of $33 million) will all fall into the 20% tax bracket.<\/p>\n<p>While experts say this could create opportunities for smaller operators to gain an advantage over DraftKings and FanDuel, it could also raise wider concerns &#8211; especially if other states follow suit and increase taxes.<\/p>\n<p>Over the past year, legislators in several states have considered increasing gambling taxes. But so far, only Ohio legislators have taken action. Last week, Massachusetts legislators rejected a proposal to increase the tax rate from 20% to 51%.<\/p>\n<p>&#8220;A tiered tax system could provide opportunities for smaller players to gain some market share at the expense of the two big players, while still maintaining a lower relative tax rate,&#8221; said a Truist analyst.<\/p>\n<p>&#8220;That said, DraftKings and FanDuels dominance is partly due to their technological products, not just promotions\/odds. Of course, there is a wider risk that more states will increase taxes, which could be progressive or not.&#8221;<\/p>\n<p>Will higher levies fuel unlawful gambling? <\/p>\n<p>On the other hand, there&#8217;s a worry that this could result in permit holders offering fewer deals in Illinois, thus pushing more gamblers toward unlawful websites that provide such deals but lack licenses and, consequently, aren&#8217;t subject to tax regulations.<\/p>\n<p>Experts point to a recent statement from the Sports Betting Alliance (a group of major operators including FanDuel, DraftKings, and BetMGM) that condemned the proposed price hike and its potential to force players into the hands of illicit operators.<\/p>\n<p>\u201cWe concur with one aspect of the Alliance\u2019s response, which is that we believe states underestimate the prevalence of the illicit market, which legal operators are fiercely competing against,\u201d Truist analysts observed.<\/p>\n<p>\u201cWe recently conducted a poll of online sports bettors, and it revealed that 31% of respondents wager offshore, though 71% of high-rollers do so. This data aligns with what we previously obtained from Juice Reel, which indicated that offshore betting companies account for 18% of total tracked bets on the platform, though they represent 46%\/50% of online sports betting volume\/revenue.\u201d<\/p>\n<p>Sign up for the iGaming newsletter. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>DraftKings and Flutter Entertainment, the parent company of FanDuel, experienced a decline in their stock values on Tuesday, May 28th, due to a negative response from the US market to&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v22.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Illinois Gambling Tax Hike: FanDuel &amp; DraftKings Stocks Plunge<\/title>\n<meta name=\"description\" content=\"Proposed Illinois gambling tax hike, replacing the current 15% rate with a graduated structure, sends shockwaves through the market, impacting FanDuel and DraftKings.\" class=\"yoast-seo-meta-tag\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/diamondreelsnodepositbonus.icu\/2024\/06\/26\/illinois-gambling-tax-hike-sends-draftkings-and-flutter-stocks-plunging\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:type\" content=\"article\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:title\" content=\"Illinois Gambling Tax Hike Sends DraftKings and Flutter Stocks Plunging\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:description\" content=\"Proposed Illinois gambling tax hike, replacing the current 15% rate with a graduated structure, sends shockwaves through the market, impacting FanDuel and DraftKings.\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:url\" content=\"https:\/\/diamondreelsnodepositbonus.icu\/2024\/06\/26\/illinois-gambling-tax-hike-sends-draftkings-and-flutter-stocks-plunging\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:site_name\" content=\"Where Casino Lovers Unite | Licensed, Secure &amp; 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