Chavdar Vasilev is a gambling news writer with several years of experience in the iGaming industry. He started creating promotional content but soon found he loved reporting on the industry itself. Since then, he’s delivered...
Read Full BioAs expected, DraftKings has announced that it will add a 50-cent surcharge to every bet in Illinois. The fee, which takes effect on September 1, mirrors FanDuel’s earlier move to pass the cost of the state’s new tax hike to customers.
DraftKings CEO Blasts Illinois Tax Hike
In a press release, Jason Robins, DraftKings CEO and Co-Founder, expressed strong disappointment with Illinois lawmakers:
“Illinois has been an important part of our growth, and we’re proud to have contributed meaningfully to the state through tax revenue, job creation, and a sustained investment in responsible gaming tools and resources.”
“We are disappointed that Illinois policymakers have chosen to more than triple our tax rate over the past two years, and we are very concerned about what this will do to the legal, regulated industry. Meanwhile, Illinois continues to fuel the rapidly growing illegal industry, which pays no taxes or fees and provides none of the consumer protections that regulated operators offer.”
DraftKings emphasized that it continues to support beneficial policymaking that promotes long-term sustainability of the industry. The operator notes that if the Illinois legislation is repealed, the company will remove the surcharge.
DraftKings Mirrors Rival FanDuel
DraftKings’ move comes two days after an identical decision by FanDuel’s parent, Flutter Entertainment.
On June 10, Flutter announced that it would pass on to customers the costs associated with Illinois’ new tax increase through a 50-cent surcharge per bet, starting September 1.
The move was a direct response to newly passed legislation that will require operators to pay 25 cents for every bet placed on their platforms up to the first 20,000 bets. After that threshold, the tax increases to 50 cents per bet.
As FanDuel and DraftKings control about 70% of the market, they will pay 50 cents on the vast majority of the bets placed on their platforms. Flutter, in the surcharge announcement, also highlighted that the new tax is the second increase in a year.
In 2024, Illinois replaced its fixed 15% tax with a graduated system based on gross gaming revenue. For FanDuel and DraftKings, that rate jumped to 40%.
Like Flutter, DraftKings Investors Respond Positively
Investors received Flutter’s surcharge announcement well, and the stock rose 1.5% on June 10. DraftKings shares also rose by 2.7% that day. That was likely due to optimism that the operator might avoid adding a surcharge, at least in the short term.
The DraftKings surcharge announcement had a minimal impact on the stock price. It closed on June 12, up nearly 1% at $37.98, before dipping 2% at the market open the next day. It has since started gaining ground.
Jefferies analysts suggest that the surcharge could provide a slight boost to DraftKings’ stock price. Still, the market has already anticipated it, so it’s already accounted for in the current price. Jeffreys and many other analysts maintain a Buy rating and remain optimistic.
Analysts note that DraftKings reported a strong start to the year. That followed strong 2024 results, during which the company posted its first-ever positive Adjusted EBITDA.
The company also maintains a healthy balance sheet with $1.1 billion in cash, following the repurchase of 3.7 million shares. It’s also realizing efficiencies in areas such as advertising.
