Flutter Entertainment is the latest company responding to recent tax changes on sports wagering in several regulated markets throughout America.
The online sports betting and gaming conglomerate joins a group of licensed operators facing tax changes in Illinois, New Jersey and Louisiana that heavily impact profits.
“On the U.S. regulatory front, I believe our sector is making meaningful progress in encouraging lawmakers to adopt a balanced tax strategy, which promotes market growth and investment,” said Flutter CEO Peter Jackson during the company’s Q2 earnings call. “We believe our substantial U.S. scale positions us well to mitigate tax changes.”
Flutter responds to Illinois tax change with transaction fee
The FanDuel owner is dealing with a new per-wager tax in Illinois implemented in July.
Illinois is charging operators 25 cents per online wager under Gov. J.B. Pritzker’s budget plan. The per-wager tax increases to 50 cents after the first 20 million bets in a year.
Flutter projects a $40 million adverse impact as a result of the tax changes nationwide. The estimation assumed that the transaction fee in Illinois is not taxable. The Illinois Gaming Board does apply its per-wager tax to bonus bets, credits and other promos.
“We’re [Flutter] obviously very disappointed that they brought this tax into play in Illinois,” continued 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.”
FanDuel is reacting to the per-wager tax by implementing a 50-cent transaction fee.
Starting Sept. 1, FanDuel will join DraftKings in charging customers a 50-cent transaction fee on all online wagers. Fanatics has vowed to implement a 25-cent transaction fee.
Hard Rock and BetMGM are taking a different approach with minimum bet thresholds.
New tax rates in Louisiana and New Jersey
FanDuel is dealing with a tax increase from 15% to 21.5% in Louisiana after the signing of a new law that allocates revenue from online sports betting toward student-athletes at Division 1 programs in the state. Meanwhile, retail wagering remains unchanged at 10%.
New Jersey is levying a 19.75% tax rate on gross gaming revenue for all licensed sports betting and online casino operators in the state. The rate change is part of a new budget for FY2026 signed by Gov. Phil Murphy, who had previously proposed a 25% tax rate.
New Jersey’ previously levied a 13% tax rate on sports betting with online casinos at 15%.
FanDuel takes a patient approach with prediction markets
Flutter is also keeping an eye on developments throughout the prediction market space.
The company plans to use its experience as an operator of Betfair Exchange, one of the largest’ betting exchanges, to evaluate a potential entry into prediction markets.
“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,” added Jackson. “We’re evaluating the various regulatory developments and assessing the potential opportunities this may present.”
Flutter released its latest earnings right after the company agreed to a major deal.
Boyd Gaming agreed to sell its 5% equity interest in FanDuel to Flutter in a deal valued at approximately $1.7 billion. By comparison, Boyd generated $3.9 billion in revenue in 2024.
The transaction provides Flutter with full control of FanDuel, giving the operator an implied valuation of $32 billion. Boyd and Flutter expect the transaction to close in Q3 2025.
Flutter expects to deliver roughly $65 million in annual cost savings related to the deal. The company expects the cost savings to offset the recent tax changes impacting FanDuel.
Flutter reports favorable second-quarter earnings
Flutter generated $4 billion in revenue in Q2 2025, a 16% increase year-over-year. Its adjusted EBITDA during the quarter was $919 million, up from $738 million in Q2 2024.
The company’s net income had a drastic decline during the quarter to $37 million. By comparison, Flutter’s net income in Q2 2024 closed at $297 million. Flutter attributed the decline to a non-cash charge related to the valuation of Fox’s option to buy a stake in FanDuel. The TV giant has an option to acquire an 18.6% stake in FanDuel. Last year, Fox expressed a desire to activate its FanDuel stake option for an estimated $4.3 billion.
Fox obtained the option when Flutter acquired The Stars Group for $6 billion in 2019.
Despite the drop in net income, Flutter reported an uptick in average monthly players with 16 million in Q2 2025. In Q2 2024, Flutter reported 14.3 million average monthly players.
It projects full-year revenue to reach $17.2 billion with adjusted EBITDA at $3.3 billion.
