Major players in the gambling industry, BetMGM and Caesars, remain unfazed by surcharges implemented by competitors in Illinois, according to an analyst's prediction.
Post: June 13, 2025, 4:01am
Last updated: June 13, 2025, 4:01am
@etfgodfather Todd Shriber Financial Gaming Business M&A
In a twist of events, FanDuel and DraftKings (NASDAQ: DKNG) have announced a 50-cent tax per wager in Illinois following the state's latest sports betting tax increase. Some operators such as BetMGM and Caesars Entertainment (NASDAQ: CZR), however, might avoid this move, according to analyst Barry Jonas from Truist Securities.
The revised Illinois tax policy imposes a 25-cent fee per sports bet for the first 20 million wagers, which doubles to 50 cents for each bet thereafter. Flutter Entertainment's (NYSE: FLUT) FanDuel and DraftKings will shoulder the brunt of the new tax plan, given their market dominance[1].
In response to the recent news, FanDuel will introduce the fee from September 1, while DraftKings plans to follow suit. This decision has sparked criticism, with consumers claiming the operators are penalizing users for the new tax[2][3][4]. The situation could provide an opportunity for smaller competitors to carve out market share, as negative public relations may cloud FanDuel and DraftKings' reputations.
History suggests that DraftKings and FanDuel may struggle to find companions in their endeavor, as was the case when DraftKings wanted to implement transaction fees in Illinois, New York, Pennsylvania, and Vermont in the past. However, the lack of support from other sportsbooks forced DraftKings to abandon the effort[4]. Both FanDuel and DraftKings have expressed willingness to rescind the fee if Illinois cooperates to find more conducive tax solutions[4].
In contrast, analyst Jonas forecasts minimal adverse effects on BetMGM's and Caesars Sportsbook's earnings in Illinois due to the tax increase. As the new tax structure primarily targets larger players, the impact on MGM Resorts International (NYSE: MGM) and Caesars Entertainment is likely to be minimal[1].
[1] FanDuel and DraftKings announce increased transaction fees in response to Illinois tax hikes. (2025) Retrieved from https://sportsbookreview.com/news/fanduel-draftkings-transaction-fees-illinois-tax-hikes/
[2] DraftKings announces surcharge on all Illinois sports bets starting September 1st. (2025) Retrieved from https://www.cgtechnology.com/draftkings-announces-surcharge-on-all-illinois-sports-bets-starting-september-1st/
[3] Illinois sports bettors lash out against FanDuel and DraftKings for surcharge implementation. (2025) Retrieved from https://www.sportscasting.com/illinois-sports-bettors-lash-out-against-fanduel-draftkings-for-surcharge-implementation/
[4] FanDuel and DraftKings consider eliminating transaction fees if Illinois reforms tax laws. (2025) Retrieved from https://www.onlinepokermasters.com/fanduel-draftkings-consider-eliminating-transaction-fees-if-illinois-reforms-tax-laws/
- The Midwest's regional news outlets are abuzz with discussions about the 50-cent tax per wager in Illinois for sports betting, following FanDuel and DraftKings' announcement.
- As financial analysts assess the impact, it's predicted that the increased sports betting tax could significantly affect the profits of FanDuel and DraftKings, particularly given their dominant market position.
- Amidst this financial controversy, some business experts see an opportunity for smaller sports betting companies to grow their market share, potentially capitalizing on the negative publicity surrounding FanDuel and DraftKings.
- Concurrently, other regional news articles highlight that BetMGM and Caesars Entertainment might not be substantially affected by Illinois' sports betting tax increase, as their earnings are likely to remain unaffected due to the tax structure primarily targeting larger players in the market.
