DraftKings and Flutter dip after Illinois unveils surprise tax hike targeting top sportsbooks
A new wagering fee could push effective tax rates above 50% for the betting giants.
DraftKings shares dropped more than 5% Monday morning, while FanDuel parent Flutter Entertainment slipped 3%, after Illinois quietly passed a new budget over the weekend that tacks on steep new fees for high-volume sportsbook operators. The new legislation, part of the state’s FY26 budget, introduces a tiered tax structure that charges $0.25 per wager up to 20 million bets annually and $0.50 for every bet beyond that.
The update effectively singles out DraftKings and FanDuel, since they are the only two operators that surpass that threshold in Illinois. The move could push their effective tax rates from about 35% to over 50%, just a year after the last increase from 15%.
Analysts estimate the changes could cut $70 million to $80 million from DraftKings’ annual EBITDA by 2026, or about 6% of its bottom line, with FanDuel also facing a nine-figure hit. They also warned that passing the cost on to customers or slashing promotions could hurt competitiveness against smaller rivals.
Prior to the dip, DraftKings shares were up about 1% over the past year while Flutter jumped 34% in the same time frame.
