U.S. Gambling Landscape and Tax Shifts
Gambling Stakes: Illinois Tax Hikes, Las Vegas Perspectives, New York OSB, Gambling.com Insights
Get the lowdown on how online gambling companies are coping with tax adjustments in different states across the nation. Here's a rundown of the reactions from powerhouses like FanDuel, DraftKings, and others:
Illinois: Time to Pony Up
- Heavier Tax Burden: Illinois is stepping up the tax game with a new sliding-scale system that targets operators like DraftKings and FanDuel, forcing them to pay up to 40% of their Adjusted Gross Revenue (AGR) if their revenue surpasses the $200 million mark[5].
- Transaction Fees on the Table: In response, FanDuel (under Flutter's wing) and DraftKings have both announced a $0.50 fee per transaction for bets placed in Illinois. These fees are designed to help offset the increased tax burden[4]. Both companies have stated they'll remove the fees if the tax is repealed[2][5].
New York and Other States: Stay Tuned
- Watching Illinois: With states like New York, New Jersey, Maryland, Massachusetts, Michigan, and Pennsylvania closely watching Illinois' tax changes, there's no word yet on specific surcharges or fees planned for these states. However, policymakers are keeping a close eye on how Illinois' changes play out and may adopt similar strategies to boost revenue[3].
- Staying Afloat: Although potential tax hikes loom, these states' gambling operators are rolling with the punches. The stock market's response to these tax shifts has been relatively positive, showing faith that companies like Flutter and DraftKings can adapt and keep profits flowing[3].
The Resilience of Flutter and DraftKings
- Adapting to the Challenge: Despite the threat of increased taxes, these companies have proven they can weather the storm. Flutter is expectant of improvements in U.S. margins by 2027, signaling that while tax changes pose a challenge, they're finding ways to maintain profitability and market presence[1][3].
- In response to Illinois' higher tax burden on casino-and-gambling operators, FanDuel (under Flutter's wing) and DraftKings have introduced a $0.50 fee per transaction for bets placed in Illinois.
- With New York and other states closely monitoring Illinois' tax changes, policymakers in these states are keeping a close eye on how the changes play out, and may adopt similar strategies to boost revenue, potentially impacting the casino-and-gambling industry.
