Despite several U.S. states raising taxes on sports betting, major online sports betting companies like DraftKings and Flutter Entertainment, which owns FanDuel, are expected to remain financially stable. According to a Fitch Ratings report published on June 16, 2025, these industry leaders will continue to enjoy stable credit ratings despite potential cuts to their margins due to tax hikes. Higher taxes in states such as Illinois, Maryland, and Louisiana, and possible increases in New Jersey, North Carolina, and Massachusetts, may affect profits. However, the steady cash flows, sustained growth, and adept financial management of these companies are likely to keep their credit ratings intact.
In New Jersey, lawmakers are considering doubling the tax rate on adjusted gross revenue from 13% to 25%, a move that could significantly impact operators’ earnings. Despite this, experts believe that the risk posed by any single state is not enough to cause a credit downgrade. However, the broader trend toward increased tax rates may reduce overall industry profitability. Companies might try to offset these costs by adjusting betting odds or introducing extra fees, though this could lead to competitive disadvantages. Rivals may lure customers with better offers, and unregulated betting options might become more appealing.
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