Deutsche sees several states following Illinois to raise gambling tax

Deutsche Bank says the Illinois bill to increase taxes on the online sports betting industry, on its own, its not “overly draconian for the operators, and of little consequence to the majority of the operators in the state.” However, the industry is positioned to endure state tax pressure for years to come, the analyst tells investors in a research note. The firm believes several states are likely to follow the lead of Illinois with higher tax rate structures, when budget needs arise, including New Jersey, Michigan, Iowa, Indiana, Massachusetts, Arizona, and Kansas. New Jersey and Michigan would be the most punitive, given the well below peer tax rates on the online sports betting side, as well as the relatively low internet casino segment tax rate, contends Deutsche Bank. Shares of DraftKings (DKNG) and Flutter Entertainment (FLUT) are down this morning following the Illinois development.