Flutter Entertainment, parent company of FanDuel, is forecasting a $40 million financial setback due to recent tax hikes on sports betting in key U.S. markets, including Illinois, New Jersey, and Louisiana. The company is taking cost-cutting steps while reaffirming its long-term commitment to U.S. growth.
FanDuel Responds to Illinois Wager Fee
A new Illinois tax, introduced in July, charges sports betting operators 25 cents for each online wager—doubling to 50 cents after the first 20 million bets annually. Flutter has voiced concern over the law’s impact.
“We’re [Flutter] obviously very disappointed that they brought this tax into play in Illinois,” said Flutter CEO Peter Jackson. “We think it really will hurt the sort of recreational customers and ultimately risk fueling the black market, which is not good for integrity of sports, it’s not good for player protection, it’s certainly not good for collection of revenue for the state.”
To address this, FanDuel will introduce a 50-cent transaction fee on all online wagers starting September 1. This mirrors DraftKings’ approach, while Fanatics will add a 25-cent fee. BetMGM and Hard Rock, meanwhile, are pursuing minimum wager thresholds instead.
The Illinois Gaming Board clarified that the new fee also applies to promotional bets, including bonuses and credits, further squeezing operator margins.
Higher Tax Rates in Louisiana and New Jersey
Elsewhere, Louisiana raised its online sports betting tax from 15% to 21.5%, with the added revenue aimed at supporting student-athletes at Division I colleges. Retail sports betting remains taxed at 10%.
New Jersey also adopted a new tax structure. Starting in the 2026 fiscal year, online sports betting and casino operators will face a 19.75% tax rate, up from the previous 13% and 15%, respectively. Governor Phil Murphy initially proposed a 25% rate before settling on the current increase.
Financial Results and FanDuel Buyout
Despite these regulatory pressures, Flutter posted strong Q2 2025 results. Revenue rose 16% to $4 billion, and adjusted EBITDA climbed 25% to $919 million. The company also reported growth in average monthly players, reaching 16 million, up from 14.3 million a year ago.
However, net income fell sharply to $37 million from $297 million in Q2 2024. Flutter attributed the drop to a non-cash charge linked to the valuation of Fox’s option to acquire an 18.6% stake in FanDuel—an option Fox gained when Flutter bought The Stars Group in 2019.
Flutter also announced a deal to purchase Boyd Gaming’s 5% stake in FanDuel for $1.7 billion. Once completed in Q3 2025, Flutter will gain full control of FanDuel, with an estimated $65 million in annual cost savings expected to help offset tax-related losses.
Exploring Future Opportunities
In addition to managing rising tax costs, Flutter is evaluating potential opportunities in the prediction markets. Drawing on its Betfair Exchange experience, the company is monitoring regulatory changes and assessing how to enter the space.
“We offer this product in lots of markets around the world, and it shares some similar characteristics of the event contracts, which will obviously be helpful to us as we consider the landscape and any developments,” Jackson added.
Source:
“FanDuel anticipates $40M negative impact from state tax changes”, flutter.com, Aug 7, 2025
The post Flutter Projects $40M Loss as U.S. Betting Tax Rates Climb first appeared on RealMoneyAction.com.