Flutter's Illinois fee puts DraftKings in hot seat: Will bettors see double hike?
Flutter Entertainment (NYSE: FLUT), the parent company of FanDuel, on Tuesday announced that it will introduce a $0.50 transaction fee on every sports bet placed on its platform within the state of Illinois, starting 1 September 2025. The move, according to a press release by the company, is a direct response to a new per-bet tax imposed by Illinois lawmakers. This development has immediately shifted attention to FanDuel’s primary competitor, DraftKings, reportedly saying that the company “anticipates taking action” and is evaluating its options, raising the prospect of a similar fee for its Illinois customers.
The decision by Flutter signals a significant shift in how major sports betting operators are choosing to deal with escalating tax burdens in key U.S. markets. The new Illinois tax, effective 1 July 2025, levies a $0.25 charge on an operator’s first 20 million wagers in a fiscal year, doubling to $0.50 for each bet thereafter. This per-transaction tax is in addition to an already implemented progressive tax on Adjusted Gross Revenue (AGR) that can reach up to 40 percent for top earners like FanDuel and DraftKings.
Flutter’s stance: Necessary pass-through in Illinois
In its , Flutter Entertainment stated that the new $0.50 fee “reflects the significant increase in the cost of operating in Illinois driven by the new Illinois Transaction Fee“. CEO Peter Jackson stressed that while FanDuel had absorbed the costs of the 2024 AGR tax hike without directly impacting customers, this additional per-bet levy made such an approach untenable.
“We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state,” Jackson stated in the release. He further warned that the fee “will likely motivate some Illinois-based customers to bet with unregulated operators,” who do not contribute state tax revenue or offer consumer protections.
Flutter has also pledged to “immediately” remove the $0.50 charge if Illinois legislators reverse their decision on the per-bet tax, positioning the fee as a direct consequence of state policy rather than a new revenue stream for the company. This is reportedly the first time FanDuel has implemented such a per-bet fee globally.
DraftKings’ Illinois move: High-stakes decision
With FanDuel making its move, the spotlight is now on DraftKings (Nasdaq: DKNG). A spokesperson for DraftKings confirmed to that the company is aware of the tax increases and “anticipates taking action and expects to share more information soon”.
This isn’t the first time DraftKings has contemplated such measures. In August 2024, the company considered a surcharge in high-tax states, including Illinois, but ultimately retracted those plans following significant public and customer backlash.
Investment bank Jefferies has suggested it is “likely” that DraftKings will mirror FanDuel’s 50-cent transaction fee. Analyst David Katz from Jefferies noted, “In our view, [Flutter’s] announcement suggests is likely to follow suit given its history of employing a surcharge on the tax increase in 2024.” Katz estimated that without mitigation, the new tax could create a ~$70 million EBITDA headwind for DraftKings.
How does it impact bettors?
The introduction of a per-bet fee, especially a flat one, disproportionately affects casual bettors placing smaller wagers. A $0.50 fee on a $1 bet represents a 50 percent surcharge, while on a $100 bet, it’s only 0.5 percent. This could make betting significantly less attractive for a large segment of the recreational market, potentially driving them to unregulated offshore sites, a concern explicitly raised by Flutter’s CEO.
The Sports Betting Alliance (SBA), representing major operators including both FanDuel and DraftKings, has condemned the Illinois per-bet tax as “crippling” and “discriminatory“.
Market response
The shares of DraftKings rose close to 5.5 percent after Flutter Entertainment announced the transaction fee on June 10. While the shares of Flutter Entertainment fell initially after the announcement, they rose 3.7 percent in two days (from the June 9 close) to end at $269.36 apiece on the NYSE on Wednesday.
DraftKings shares have plunged close to 10 percent in the last six months, underperforming the Nasdaq 100 index, which has risen nearly 0.5 percent during the period. The New York-listed shares of Flutter Entertainment, meanwhile, have fallen close to 3 percent during the last six months.
