Bets on sports betting giants came up short Tuesday, as shares of gambling market dominators DraftKings and FanDuel tanked as Illinois closed in on a significant increase on the tax rate facing the companies’ operations in the state.DraftKings stock nosedived 11% and U.S.-listed shares of FanDuel parent Flutter Entertainment tanked 7% in Tuesday trading, moving against the tech-heavy Nasdaq stock index’s modest gain.
That would up DraftKings’ and FanDuel’s estimated effective tax rates in Illinois to about 35%, according to JPMorgan analyst Joseph Greff, an increase which would dramatically cut into the companies’ earnings power in theIt’s DraftKings’ steepest daily loss since Nov. 2022, sending it toward its lowest closing share price since January, and Flutter’s worst day since March, propelling it to a four-week low .