FILE - FanDuel, DraftKings and other online gambling apps are displayed on a phone in San Francisco, Sept. 26, 2022. Online sports gambling apps are facing tax hikes in some states this year. NEW YORK — States are looking to increase their take from the $16 billion online sports gambling industry as it expands across the country with big partnerships.
All sports wagering revenue in the U.S. jumped 22% to $3.33 billion in the first quarter of 2024, according to the American Gaming Association. The industry’s growth has piqued the interest of state governments. In a conference call with investors, DraftKings CEO Jason D. Robins said that tax increases could hurt the company’s ability to be competitive and draw customers away from the illegal gambling market.
The new tax rate in Illinois could prompt DraftKings and FanDuel to take steps including pulling back on local marketing and promotion deals, according to an analysis by MoffettNathanson. It could also mean revisiting the terms of deals with existing partners.
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