DraftKings Inc. (NASDAQ:DKNG) is one of the 10 best growth stocks to buy according to billionaires. On June 10, Jefferies analyst David Katz released a note discussing the impact of the Illinois legislature’s approval of a new betting transaction tax on all in-state wagers announced in the first week of June. As a result of the higher tax, operators are expected to adjust their fees accordingly.
The new transaction tax, effective from July 1, requires operators to be charged $0.25 for each bet up to 20 million bets and $0.50 for each additional bet thereafter.
On June 10, Flutter Entertainment plc (NYSE:FLTR), another player in the space, announced a $0.50 fee for each bet made on its FanDuel platform, effective September 1, to offset the added cost. According to Jefferies analyst David Katz, this move is likely to set a precedent across the industry.
Following the development, Katz believed that DraftKings is likely to adopt a similar surcharge model, given its practicality in directly addressing the tax burden. While such a fee could be passed through to consumers, the analyst views the development as moderately positive for the stock. He maintained a Buy rating on DraftKings, with a $60 price target, reflecting continued confidence in the company’s ability to navigate evolving regulatory frameworks.
Notably, two days after the analyst’s note, on June 12, DraftKings also announced that it would implement a $0.50 transaction fee on all mobile and online bets placed in Illinois, effective September 1. While the company CEO, Jason Robins, shared his disappointment over the tripling of the company’s tax rate in the state over the past two years, he offered to remove the fee immediately if the new legislation is repealed.
DraftKings Inc. is a Boston, Massachusetts-based gambling company that offers sportsbook and daily fantasy sports (DFS) services.
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