DKNG - DraftKings hit by Illinois sports betting bill

2024-05-28 07:56:23 ET

DraftKings Inc (NASDAQ: DKNG) is down close to 10% in premarket on Tuesday after Illinois passed a legislation related to a sports-betting tax hike.

Here’s what Illinois legislation means for

Illinois will now impose the second highest tax on sports betting companies.

For , it would mean 20% on its retail adjusted gross revenue of about $7.0 million and 40% on its digital adjusted gross revenue of some $350 million, as per iGamingBusiness.

The news is significant for peer FanDuel parent Flutter Entertainment as well that’s down roughly 5.0% at writing.

Earlier in May, DraftKings Inc reported market-beating financial results for the first quarter and issued impressive sales guidance for the future as well. Its stock is now down nearly 25% versus its year-to-date high.

Why else is DraftKings stock trending today?

DraftKings stock is in focus this morning also because there have been rumours of it considering proceeding with the takeover of Simplebet.

The New York based B2B platform offers microbetting markets for NFL, MLB, NBA as well as college football and basketball.

is reportedly willing to pay $210 million to acquire Simplebet – a valuation it achieved in a Series C round in 2021.

Note that the Nasdaq-listed firm already has a 15% stake in Simplebet on top of a multi-year agreement aimed at expanding its in-game offerings via Simplebet’s products. Wall Street currently has a consensus “overweight” rating on DraftKings stock.

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