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DraftKings and Flutter dip after Illinois unveils surprise tax hike targeting top sportsbooks

A new wagering fee could push effective tax rates above 50% for the betting giants.

6/2/25 8:46AM

DraftKings shares dropped more than 5% Monday morning, while FanDuel parent Flutter Entertainment slipped 3%, after Illinois quietly passed a new budget over the weekend that tacks on steep new fees for high-volume sportsbook operators. The new legislation, part of the state’s FY26 budget, introduces a tiered tax structure that charges $0.25 per wager up to 20 million bets annually and $0.50 for every bet beyond that.

The update effectively singles out DraftKings and FanDuel, since they are the only two operators that surpass that threshold in Illinois. The move could push their effective tax rates from about 35% to over 50%, just a year after the last increase from 15%.

Analysts estimate the changes could cut $70 million to $80 million from DraftKings’ annual EBITDA by 2026, or about 6% of its bottom line, with FanDuel also facing a nine-figure hit. They also warned that passing the cost on to customers or slashing promotions could hurt competitiveness against smaller rivals.

Prior to the dip, DraftKings shares were up about 1% over the past year while Flutter jumped 34% in the same time frame.

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WBD shares were up 30% on the report, while Paramount Skydance jumped 8%.

The offer would cover WBD’s entire business — cable networks, movie studios, the whole enchilada. That comes after WBD announced plans last year to split into two divisions: one for streaming and studios, the other for its traditional cable and TV assets. A recent Wells Fargo note gave WBD a price target hike, primarily because the analysts viewed it as a prime takeover candidate.

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Fox and News Corp slide as investors digest $3.3 billion Murdoch succession settlement

Fox and News Corp shares dropped on Tuesday after Rupert Murdoch’s heirs agreed to a $3.3 billion settlement to resolve a long-running succession drama.

Under the deal, Prudence, Elisabeth, and James Murdoch will each receive about $1.1 billion, paid for in part by Fox selling 16.9 million Class B voting shares and News Corp selling 14.2 million shares. The stock sales will raise roughly $1.37 billion on behalf of the three heirs.

The new trust for Lachlan Murdoch will now control about 36.2% of Fox’s Class B shares and roughly 33.1% of News Corp’s stock, granting him uncontested voting authority over both companies for the next 25 years. Originally, the Murdoch trust was designed to hand over voting control of Fox and News Corp to Prudence, Elisabeth, Lachlan, and James after his death.

Investors are weighing the trade-off. Clear leadership under Lachlan may resolve conflict internally, but the share dilution, executed at a roughly 4.5% discount, means long-term investors now hold slightly less clout than before.

Both companies’ stocks were trading close to all-time highs prior to the announcement.

DraftKings and Flutter dip after Illinois unveils surprise tax hike targeting top sportsbooks

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