Illinois Sports Betting Tax Proposal Shakes Up Market for DraftKings and Flutter

The potential tax hike, which suggests replacing the current 15% flat rate with a graduated structure ranging from 20% to 40%, affected the trading prices of these companies.

Market Reaction

Flutter Entertainment’s stock closed at $204.11 before the Memorial Day weekend. However, within the first half-hour of trading on Tuesday, the stock dropped to $196.64, reflecting a decrease of 3.7%.

The downward trend continued throughout the day, with the stock closing at $188.33, representing a total decline of 7.7% from its pre-weekend closing price.

DraftKings experienced a similar reaction in the market. The company’s stock ended the previous week priced at $40.75. Upon the market reopening on Tuesday, DraftKings’ stock plummeted to $35.88 within the first hour, a significant 12.0% drop.

Despite some recovery attempts, DraftKings closed the day at $36.61, which is still down by 10.2% from its closing price before the weekend.

Financial Implications and Investor Concerns

The proposed tax increase in Illinois has clearly rattled investors, leading to immediate declines in the stock prices of both DraftKings and Flutter.

The market’s swift reaction shows the financial strain such a tax hike could impose on companies, that are major players in the Illinois sports betting market.

Both Flutter and DraftKings, expected to fall into the highest tax bracket under the new proposal, face the prospect of higher tax obligations. This financial burden could impact their profitability and operational strategies moving forward.