DraftKings CEO Blasts Illinois Tax Hike

In a press release, Jason Robins, DraftKings CEO and Co-Founder, expressed strong disappointment with Illinois lawmakers:

“Illinois has been an important part of our growth, and we’re proud to have contributed meaningfully to the state through tax revenue, job creation, and a sustained investment in responsible gaming tools and resources.”

“We are disappointed that Illinois policymakers have chosen to more than triple our tax rate over the past two years, and we are very concerned about what this will do to the legal, regulated industry. Meanwhile, Illinois continues to fuel the rapidly growing illegal industry, which pays no taxes or fees and provides none of the consumer protections that regulated operators offer.”

DraftKings emphasized that it continues to support beneficial policymaking that promotes long-term sustainability of the industry. The operator notes that if the Illinois legislation is repealed, the company will remove the surcharge.

DraftKings Mirrors Rival FanDuel

DraftKings’ move comes two days after an identical decision by FanDuel’s parent, Flutter Entertainment.

On June 10, Flutter announced that it would pass on to customers the costs associated with Illinois’ new tax increase through a 50-cent surcharge per bet, starting September 1.

The move was a direct response to newly passed legislation that will require operators to pay 25 cents for every bet placed on their platforms up to the first 20 million bets. After that threshold, the tax increases to 50 cents per bet.

As FanDuel and DraftKings control about 70% of the market, they will pay 50 cents on the vast majority of the bets placed on their platforms. Flutter, in the surcharge announcement, also highlighted that the new tax is the second increase in a year.

In 2024, Illinois replaced its fixed 15% tax with a graduated system based on gross gaming revenue. For FanDuel and DraftKings, that rate jumped to 40%.

Like Flutter, DraftKings Investors Respond Positively

Investors received Flutter’s surcharge announcement well, and the stock rose 1.5% on June 10. DraftKings shares also rose by 2.7% that day. That was likely due to optimism that the operator might avoid adding a surcharge, at least in the short term.

The DraftKings surcharge announcement had a minimal impact on the stock price. It closed on June 12, up nearly 1% at $37.98, before dipping 2% at the market open the next day. It has since started gaining ground.

Jefferies analysts suggest that the surcharge could provide a slight boost to DraftKings’ stock price. Still, the market has already anticipated it, so it’s already accounted for in the current price. Jeffreys and many other analysts maintain a Buy rating and remain optimistic.

Analysts note that DraftKings reported a strong start to the year. That followed strong 2024 results, during which the company posted its first-ever positive Adjusted EBITDA.

The company also maintains a healthy balance sheet with $1.1 billion in cash, following the repurchase of 3.7 million shares. It’s also realizing efficiencies in areas such as advertising.

The post DraftKings Follows FanDuel’s Lead, Will Implement a 50-Cent Surcharge on Bets in Illinois appeared first on CasinoBeats.

The big question now: will rival DraftKings follow suit, and could this become an industry standard?

Flutter Responds to Illinois Tax Hike

The FanDuel announcement comes as no surprise to many. On May 31, the Illinois legislature passed a new tax hike on every bet made in the state. Under the new tax, operators will pay 25 cents for every bet placed on their platforms up to the first 20 million bets. After that threshold, the tax increases to 50 cents per bet.

The 50-cent tax directly applies to FanDuel, the sports betting market leader in the US. While Illinois lawmakers believe that large corporations like FanDuel and DraftKings can afford the increase, the company doesn’t share their view.

In a press release, Peter Jackson, CEO of FanDuel’s parent company, Flutter, said:

“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth, and maximize revenue for states over time.”

Flutter stressed that this is the second tax hike in a year in Illinois. In 2024, FanDuel’s tax rose from 15% to 40%. The company emphasized that at the time, it made “extensive efforts” to absorb the cost without affecting its customers.

Flutter highlights that if Illinois decides to reverse its decision on the new tax, FanDuel will immediately remove the surcharge.

Flutter Investors Shrug Off The Surcharge News

After the Illinois tax news, Flutter’s stock dipped 2%, but investors seem to have welcomed FanDuel’s bold move. After the announcement, the stock closed on Tuesday up 1.5% at $267.52.

The rebound suggests that investors view FanDuel’s decision to pass the tax on to customers as a pragmatic and disciplined move, rather than a sign of financial weakness.

Analysts estimated that the new tax hike in Illinois would reduce Flutter’s US profits by $74 million annually. However, the surcharge announcement appears to have reassured investors that Flutter will protect margins.

In addition, Flutter reiterated that it expects to grow its group-wide profit by 35% to $3.18 billion, maintaining its forecasts. That news likely increased investor confidence as well.

Flutter’s move is also gaining approval from analysts. A consensus of 22 analysts suggests a one-year stock price target of around $300, implying a 12% increase from the current price. Twenty-one brokerage firms maintain an “outperform” rating for the company.

Meanwhile, gambling industry consultant and analyst Steve Ruddock sees the surcharge as a positive move for the company:

“FanDuel is doing the right thing by transparently showing its customers the cost and its source. Like a mom-and-pop store charging a credit card transaction fee, or a restaurant highlighting the meal tax on the receipt rather than raising menu items, transparency is always good.”

DraftKings Weighs Its Options

FanDuel’s main rival, DraftKings, experienced a 2.6% stock rise on Tuesday. That reflects optimism that the operator might avoid adding a surcharge, at least in the short term.

So far, DraftKings has been cautious. In an emailed statement, the company said that it “anticipates taking action and expects to share more information soon.”

But many analysts think a surcharge is inevitable. Jefferies analyst David Katz expects DraftKings to follow FanDuel’s decision:

“Given the structure of the tax, a surcharge is the most direct cost offset, and we view the move as a modest positive for the shares of the operators.”

Katz doesn’t expect either company to lose market share to smaller operators, which could also impose a surcharge. Combined, FanDuel and DraftKings take about 75% of the Illinois sports betting market.

Citizens’ gaming analyst estimates that the new surcharge will result in $79 million in new 2026 revenue for DraftKings (if it implements it), or 5.4% of its projected EBITDA. Meanwhile, FanDuel will generate $86 million, or approximately 2% of its 2026 EBITDA.

Could Per-Bet Surcharges Spread Nationwide?

FanDuel’s surcharge could be a turning point in the US sports betting industry. Once taboo, passing tax costs to consumers could become a standard practice for operators to resist tax hikes.

BMO Capital Markets analyst Brian Pitz said that Flutter’s move illustrates how operators might respond to regulation:

“New fees on every bet could drive users to leverage illegal operators who won’t add a fee (because they don’t pay state taxes), and are thus unaffected by the new IL per-bet tax.”

The risk of driving consumers to illegal offshore platforms is a concern of the industry. The Sports Betting Alliance, a trade group representing FanDuel, DraftKings, and other prominent operators, has repeatedly warned lawmakers that aggressive tax policies could drive consumers to illegal sites.

Illinois’ new policy could become a case study for other state legislatures. In response, operators will likely adopt a clear message: “If lawmakers impose per-bet taxes, expect us to pass them on to voters directly.”

FanDuel and its peers could use this weapon against tax hike proposals elsewhere. For example, Louisiana recently passed a bill that more than doubles the tax on sports betting.

Ohio is another state on the radar. An active bill in the Buckeye State proposes adding a 2% tax on total wagers placed in the state, in addition to the existing 20% tax on revenue (which was already doubled once, and there have been proposals for another increase).

Other examples include New York and Pennsylvania, which heavily tax operators.

Normalizing Consumer Fees?

However, while some industry observers warn of a consumer backlash, others believe the move is part of a broader pricing evolution.

Ruddock observes: “We live in a world where new fees or price increases occur frequently, including streaming subscriptions, ATM fees, and delivery charges, to name a few.”

He adds that it won’t have a significant impact on the consumer:

“This will have a near-zero impact on casual bettors. Casual bettors don’t go broke. They don’t have a bankroll that gets reduced to zero. They have jobs and dedicate a certain amount of their disposable income to betting. The only difference is that instead of betting $10 or $50 per week, they now bet $12.50 or $55.00 per week.”

Given the popularity of small wager parlays with potentially high returns, Illinois bettors may also simply absorb the impact themselves, given that multi-game wagers are often purely for entertainment purposes and to provide interest in a busy sporting calendar.

Déjà Vu: DraftKings Tried This First

FanDuel’s surcharge announcement is not a new idea. Ironically, the operator is doing what DraftKings tried and abandoned last year.

In 2024, facing Illinois’ first tax hike (from 15% to 40%), DraftKings announced plans to add a surcharge on winning bets in states with high tax rates of 20% or higher, such as New York, Pennsylvania, Illinois, and Vermont.

However, the plan was short-lived. Factors such as customer backlash, rejection by competitors (including FanDuel), and adverse analyst reaction forced DraftKings to back out of the plan.

Now, with even higher taxes in Illinois, FanDuel has flipped its stance. While it’s likely to follow, DraftKings might wait and watch closely if FanDuel receives similar backlash.

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Front Office Sports broke the news on Monday. Neither company has confirmed the news, with a DraftKings spokesperson telling FOS that its discussions with other businesses are part of normal operations.

While unconfirmed, the move signals DraftKings’ strong interest in a highly debated market that offers an alternative under federal oversight to traditional sports betting. Notably, DraftKings applied for a market prediction license but withdrew the application in April.

Railbird was founded in 2021 by Miles Saffran and Edward Tian, former Point72 Asset Management executives. Point72 is the family office run by former hedge fund boss Steven Cohen.

Railbird is yet to launch, but it has secured the regulatory approval to operate nationwide. For DraftKings, a potential acquisition would mean a shortcut to access prediction platforms without going through the lengthy licensing process it would have if it continued with its application.

As prediction markets are federally regulated, DraftKings would also significantly benefit from getting access to a new customer base. That includes the nation’s largest states, California and Texas, where sports betting remains illegal.

The move would be strategic as many observers expect a wave of consolidation between sportsbooks and prediction markets ahead of the football season.

FanDuel Explores Partnership with Kalshi

DraftKings is not the only one eyeing prediction markets. Last month, reports surfaced that FanDuel is exploring a deal with Kalshi, the leading prediction markets platform in the US. However, unlike DraftKings, FanDuel is potentially looking into a partnership rather than an acquisition.

A potential partnership would be beneficial to both companies. FanDuel would enter new markets from a ‘sports betting’ perspective, adding to its existing DFS product in many states.

The sports betting market leader would also gain access to new “betting” verticals. Furthermore, the deal would help alleviate state tax burdens, as Kalshi falls under CFTC oversight.

Meanwhile, Kalshi would benefit from getting exposure to FanDuel’s 12 million active users. The company may also gain access to FanDuel’s advanced tech-stack, including payments and compliance infrastructure.

That could help Kalshi boost liquidity across markets. With a large influx of new users, the market volume could rise, making them more efficient and engaging. Through FanDuel, Kalshi could also receive more exposure and become a household name.

FanDuel or Kalshi have not confirmed the possible partnership. Still, these discussions highlight the intense interest among major operators in blending prediction markets with more traditional wagering products.

Kalshi Faces Legal Challenges Despite Federal Backing

Kalshi has experienced rapid growth, especially since the beginning of the year when it started offering sports event contracts. However, the growth has not come without significant legal pushback.

Several states have raised the alarm and claim that Kalshi’s sports event contracts are a form of illegal gambling. Regulators from states like Nevada, New Jersey, Maryland, and Ohio sent Kalshi cease-and-desist letters, arguing that the events violate state gaming laws.

In response, Kalshi launched legal challenges asserting that its operations fall under federal law and thus preempt state restrictions. The platform scored some early wins, with judges blocking the cease-and-desist orders in New Jersey and Nevada.

At the heart of the dispute between Kalshi and the states is whether event contracts, and sports event contracts in particular, should be regulated as financial derivatives or traditional bets.

In the Maryland case, a judge questioned Kalshi’s conflicting statements on the matter. The prediction markets platform’s claim that event contracts fall under CFTC oversight collided with an earlier argument that those same contracts lack economic significance, thus not falling under CFTC governance.

The outcome of the Maryland case could have far-reaching implications for the gambling industry and the future of state versus federal oversight.

A Transformative Moment for US Betting

The outcome of Kalshi’s legal battles could reshape the US betting as prediction markets could become the next frontier of expansion.

Both FanDuel and DraftKings are already signaling interest, potentially laying groundwork to leverage shared exchange-sports betting infrastructure. That will allow them to enter new markets and potentially sidestep state gambling taxes.

Adding momentum, CFTC Chair nominee Brian D. Quintenz has signaled openness to expanding sports prediction markets under federal oversight. If the courts affirm federal preemption over state laws, these platforms will undoubtedly experience rapid expansion.

Prediction markets can also offer sportsbooks a way to engage users in the off-season through different “betting” categories. Examples include politics and macroeconomic indicators.

As the lines between sports betting and sports event prediction markets continue to dissolve, the next few months could be critical for the future of sports betting in the US.

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BETZ extended its year-to-date lead over the S&P 500 Index, which lost momentum and closed slightly lower last week amid fears of escalating trade tensions.

This Week’s Biggest Gains:

Esports Entertainment Surges Despite Financial Struggles

Esports Entertainment Group was the top gainer among the gaming stocks in our coverage universe, gaining 21.6% over the past week. 

The stock has been highly volatile over the past few weeks. Two weeks ago, it was down 16.2%, but following last week’s gains, the stock is up over 56% for the year. Still, it trades approximately 30% below its 52-week high.

The company, which voluntarily delisted from Nasdaq last year and now trades OTC, has stopped publicly reporting earnings. The stock’s low trading volumes and high volatility make it prone to manipulation and speculation. 

Despite last week’s rally, the company remains in severe financial distress, with ongoing losses, mounting debt, and negative shareholder equity.

DraftKings Rebounds on Valuation Optimism

DraftKings was among the other major gainers with the stock rising 5.4% last week. 

It was among the biggest losers in the preceding week on fears that the provisions of the One Big Beautiful Big Act (OBBBA) would dampen gambling activity.

For context, the Act mandates a 90% deduction for losses (versus the previous regime of 100% deduction), which could result in gamblers paying taxes even if they don’t make a profit.

Investor sentiment improved after analysts argued the sell-off was overdone. 

Morgan Stanley raised its target price to $52 while maintaining the “overweight” rating, while Citi maintained its “buy” rating and $58 target price on DraftKings. 

The brokerage sees DraftKings shares as undervalued in light of Flutter’s acquisition of Boyd Gaming’s 5% equity stake in FanDuel, which values FanDuel at $31 billion. 

According to Citi, DraftKings trades at a 7% discount to the implied valuation of 17.4x 2026 EV-EBITDA for FanDuel.

Mizuho also echoed similar views and said that while FanDuel and DraftKings have similar market share, the former’s implied market capitalization of $40 billion in the transaction is roughly twice DraftKings’ market capitalization.

Wynn Resorts Extends Gains

While it didn’t repeat the 14% growth from last week, Wynn Resorts’ stock rose over 5.2% last week, which extended its year-to-date gains to 29%. 

On Monday, Wynn Resorts stock rose nearly 3% after Goldman Sachs reinitiated coverage with a Buy rating and $122 price target.

Goldman Sachs joined JPMorgan, which also initiated coverage of gaming stocks last month. Apart from Wynn, Goldman Sachs put a “buy” rating for Caesars Entertainment and a “neutral” rating for Las Vegas Sands. The brokerage, however, rated MGM Resorts as a “sell.”

Golden Entertainment Turns Positive for the Year

Golden Entertainment stock gained nearly 5% last week, even as there wasn’t any company-specific news. The company did pay a 25-cent dividend the previous week, but its record date was June 25. Nonetheless, after last week’s rise, the stock has turned positive for the year.

Golden Entertainment is focused on deleveraging its balance sheet through the sale of non-core assets, allowing the company to focus on its operations in Nevada primarily.

The Week’s Biggest Losers

Skillz Sinks on Broader Market Weakness

Skillz was the worst-performing stock in our coverage universe and lost over 7% last week. While there was no company-specific news last week, the stock traded on a weak note amid broader market weakness. 

Moreover, as a loss-making enterprise, Skillz was particularly under pressure last week. It has a 5-year beta of 2.7x, which means that it is 2.7x as volatile as broader markets.

The company’s paying monthly active users have fallen by over 41% over the last two years. It has been cutting marketing and operating expenses to reduce cash burn, but it has yet to show evidence of a turnaround.

Gambling.com Declines Amid Tariff Fears

Gambling.com Group Ltd was another major loser, falling nearly 5% last week. The stock was roughly flat for the week but fell over 4% on Friday amid US-EU tariff escalation rumours, which led to a market sell-off.

Playtika Slides Further

Playtika Holdings is back on the list of the biggest losers as the stock lost 4.8% last week, despite no major company-specific news. 

The stock is now down 32% for the year amid concerns that the company’s user base is shrinking due to its reliance on older mobile game titles and questions about long-term growth prospects. 

Penn Entertainment Falls on Regional Revenue Drop

Penn Entertainment rounded up the top losers, shedding 3.5% for the week. The stock was in the green until Thursday but fell 7.6% on Friday after Indiana and Iowa reported a year-over-year decline in gaming revenue for June.

Additional tariff-related worries further pressured the stock, which underperformed compared to rivals such as Sands Las Vegas, DraftKings, and MGM Resorts. 

Other Major Industry Developments Last Week

On Wednesday, Blackstone-backed gaming company Cirsa went public in Barcelona. 

While the IPO was oversubscribed multiple times, it closed at the IPO price of €15 on its first trading day and has remained flat since then, closing at the same level last week. 

While the IPO saw strong interest from investors, concerns over the company’s high debt pile, heavy reliance on Latin American markets and online gaming, and rich valuations dampened sentiments.

In another development, Senate Republicans blocked attempts to roll back the gambling tax provisions in the OBBBA. The new rules, which will take effect next year, are expected to generate $1.1 billion in tax revenue over the next eight years.

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The payout comes after the DCP investigated DraftKings for misleading marketing practices by offering deposit match bonuses without fully disclosing the requirements.

The affected 7,000 users participated in the bonus offers between October 19, 2021, and January 4, 2023. They won’t need to take any action to claim their refunds, as DraftKings will automatically notify them within 60 days. In addition to the refunds, the operator has agreed to:

• Pay $50,000 to support programs for consumer complaint resolution, protection, and education.
• Provide annual training on Connecticut’s relevant laws to all marketing and advertising staff in the state.
• Enhance the visibility of its educational hub and game tutorials for bonus promotions.
• Warn consumers about potential scams posing as refund notices, urging them to verify communications through the DCP.

In a press release, DCP Gaming Division Director Kris Gilman highlighted that all operators must clearly communicate the terms of promotions and added,

“We are happy that DraftKings has agreed to assess its promotions, provide additional training to its employees regarding Connecticut’s laws and regulations, and return funds to consumers who misunderstood and in many cases were completely unaware of the terms of the promotions they participated in.”

Second Consumer Repayment in a Year for DraftKings in CT

While not technically a fine, the $3 million refund is the second case for DraftKings in Connecticut, where the operator had to repay consumers.

Last summer, the DCP fined DraftKings $19,500 for operating a slot game that didn’t pay as advertised. According to the regulator, 522 people from the state wagered nearly $24,000 on over 20,659 spins on the Deal or No Deal Banker’s Bonanza slot by White Hat Gaming without receiving a win.

The game has a 95% advertised return to player (RTP). This means that, on average, it pays back 95% of the money wagered.

Neither DraftKings nor White Hat notified DCP for over a week after players brought up the issue. At the same time, the operator refunded $23,909 to those affected.

White Hat fixed the glitch, but only after the regulator responded to consumer complaints. As a result, the content provider was fined $3,500.

DraftKings Faces Multiple Lawsuits Over Misleading Advertising

The DCP investigation into misleading advertising is not the first time DraftKings has faced scrutiny over deceptive advertising.
The operator is currently facing a series of lawsuits accusing it of deceptive “risk-free” and “bonus bet” promotions.

A New York class-action lawsuit argues that DraftKings’ “risk-free” and deposit-match bonuses mislead bettors because instead of cash, it refunds losses in restricted bonus bets. In turn, this forces players to wager under unclear conditions.

A similar case in Pennsylvania challenges the transparency of DraftKings promotions, such as the “risk-free”, “no sweat” (“no sweat” replaced “risk-free” language due to various lawsuits), and deposit matches.

That lawsuit argues that these promotions have complex playthrough requirements that force players into costly wagering.

Meanwhile, the city of Baltimore filed a consumer protection suit against DraftKings and FanDuel. It accuses the platforms of using data-driven mechanisms to hook and monetize vulnerable and problem gamblers.

Caesars Palace Sued Over Deposit Match Bonuses in PA

Beyond DraftKings, similar marketing concerns have emerged with other operators, including Caesars Palace Online Casino in Pennsylvania.

In June, the Public Health Advocacy Institute (PHAI) filed a lawsuit against the mobile platform and its retail partner, Harrah’s Philadelphia Casino. PHAI argues that the defendants’ welcome bonus is “dangerous, misleading, and illegal.”

According to PHAI, Caesars Palace promises new customers a deposit match bonus of up to $2,500. However, to receive this amount while playing blackjack, they would need to wager $375,000.

PHAI claims the public is not told that the promotion is designed to “new customers in a ‘wild chase of action,’ where the bonus is unattainable and therefore impossible to win.”

The lawsuit seeks an injunction to stop the promotion and similar playthrough bonuses. It also seeks statutory damages and attorneys’ fees.

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The question, buried among over a dozen proposed Delta Sync features, was shared on Reddit and has sparked speculations that the airline could be testing the waters for future in-flight sports betting.

Delta Has Already Partnered With DraftKings

The survey is not Delta’s first foray into the sports betting conversation.

The airline made headlines in January when it announced a partnership with sports betting giant DraftKings. The news raised numerous questions and scrutiny.

However, in February, Delta CEO Ed Bastian insisted that the partnership would not include cash, real-money gambling, or SkyMiles. Instead, it would feature free in-flight gaming powered by DraftKings technology.

The integration of DraftKings technology will be available via Delta Sync, the airline’s in-flight portal, which is accessible only to SkyMiles members using personal devices over in-flight Wi-Fi.

Delta emphasized that the DraftKings games will be purely for entertainment and customer engagement, not gambling.

A Win-Win Without Wagering

Although the initial partnership appears limited, Delta and DraftKings could gain substantially.

Delta, which flew around 200 million passengers in 2024, could use DraftKings’ powered games to drive customer engagement, SkyMiles enrollment, and monetize through advertising or referral deals.

According to the airline, in the first year of DeltaSync (February 2023 – February 2024), 39 million customers logged over 45 million streaming sessions onboard. Since then, the airline has continued to expand DeltaSync from about 650 to almost 900 planes.

If just 20% of the 200 million passengers (approximately 40 million) engage with the free DraftKings games, Delta has a larger sports-centric audience than Canada, which could be targeted after landing. Even a modest referral bonus by DraftKings per new customer could mean millions for Delta.

Meanwhile, DraftKings gains access to an audience of millions of passengers with limited distractions, without competition.

According to Delta, Millennials and Gen Z now make up 60% of all Delta Sync Wi-Fi users. That’s key to DraftKings, as these demographics are vital to the sports betting industry.

This could allow the company to reduce customer acquisition costs, which various estimates indicate are over $300 per new account.

As sports betting is now legal in almost 40 states, DraftKings can push state-compliant deposit offers the moment the passenger’s plane connects to the local network once they land.

The sportsbook also doesn’t have to worry about targeting users under 21. That’s because DeltaSync would restrict access to the free-to-play DraftKings-powered games to individuals under 21.

Can Delta Offer Real-Money Betting Onboard?

While Delta is inquiring about passengers’ opinions on sports betting, current laws prohibit onboard gambling.

The Gambling Devices Act of 1962 (known as the Johnson Act)prohibits transporting gambling devices in interstate commerce. Additionally, the Gorton Amendment to the Federal Aviation Administration Authorization Act of 1994 prohibited gambling on any plane flying to or from the United States.

Furthermore, placing bets mid-flight over state lines and transmitting bet data from the plane could be violations of the Wire Act and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

Could Sports Betting Come to Planes?

It’s not unprecedented for a travel sector to embrace gambling.

US-registered cruise ships have been able to provide gambling via the 1991 United States-Flag Cruise Ship Competitiveness Act. This has led to some notable partnerships, including that of BetMGM and Carnival Cruises.

At the time, airlines lobbied for similar treatment, arguing that foreign carriers would gain an unfair edge (something the Gorton Amendment addressed).

Interestingly, Singapore Airlines and Swiss International Air offered in-flight gambling in the past. The latter used seat-based options, but discontinued them after a 1998 crash of a New York-Geneva flight. Investigations later discovered that faulty wiring in the entertainment system contributed to the crash.

For legal gambling on aircraft, Congress must amend the Johnson Act, repeal or amend the Gorton Amendment, and ensure compliance with the Wire Act and UIGEA. However, that’s much easier said than done. There are also the technology concerns based on the Swissair experience, and everyday pushback about the exposure to gambling.

Still, the financial appeal remains. In 1996, the Department of Transportation estimated that each aircraft could generate $1 million annually from gambling. Adjusted for inflation, that’s roughly $2 million today.

For Delta’s roughly 880 planes equipped with DeltaSync, that could amount to $1.76 billion annually. Even if Delta gets 10% of that, it would make $176 million each year. And it should be added that the US sentiment towards gambling has changed significantly since 1996. That means the number could be higher.

While the Delta-DraftKings partnership will initially be a free-to-play experience, this recent survey suggests that Delta is testing the waters for deeper engagement and laying the groundwork for future opportunities.

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Lauren Pfingstag Vahey, DraftKings’ Senior Director of Federal Affairs, and Griffin Finan, SVP & Deputy General Counsel, will lead the PAC, which will be under the DraftKings Inc. Political Action Committee name.

DraftKings is not the first gambling company to establish a PAC. Casino operators like MGM Resorts and Caesars Entertainment already have PACs. Also, daily fantasy sports company PrizePicks started a PAC in 2023.

However, DraftKings is the first platform in the sports betting sector with a PAC, signaling a possible rise in direct interest in shaping public policy.

The creation of the DraftKings PAC comes amid factors like scrutiny, antitrust concerns, and tax increases in some states, including Illinois.

What Is a Political Action Committee?

A PAC is an organization created to raise and distribute funds to support or oppose political candidates, ballot initiatives, or legislation.

These committees are required to disclose their donors and spending activities to the Federal Election Commission (FEC). They are also subject ot contribution limits.

As corporations like DraftKings are not allowed to donate directly to candidates or party committees, they establish PACs, which corporate stakeholders fund to support candidates aligned with their interests.

There are different kinds of PACs, with the DraftKings PAC falling under a separate segregated fund (SSF). That means the committee can only solicit contributions from individuals connected to DraftKings.

DraftKings’ PAC isn’t the company’s first entry into political spending. According to federal disclosure filings, in 2024. It spent $420,000 on federal lobbying and $502,000 in in-kind donations to President Donald Trump’s inaugural committee.

Why DraftKings Is Launching a PAC Now?

The PAC establishment is a strategic move for DraftKings. It allows the company to employ a two-way strategy for political influence, utilizing both lobbying and PACs.

The former gives it direct communication with lawmakers and agencies. Meanwhile, the PAC can make political contributions to preferred candidates and their campaign committees.

It also comes amid heightened scrutiny and regulatory pressures. DraftKings, along with FanDuel, has faced antitrust concerns. Some lawmakers are accusing the two platforms of working together to “obstruct or impair competition.”

Last year, two bipartisan lawmakers urged the Federal Trade Commission and the Department of Justice to investigate their actions following their 2016 failed merger.

The PAC also comes amid rising tax burdens. About a week ago, DraftKings announced that it would implement a 50-cent surcharge on all bets in Illinois. The operator followed the steps of rival FanDuel, which had made a similar announcement days prior.

The move by the two platforms comes after the state implemented a new tax hike. Recently, DraftKings CEO Jason Robins criticized Illinois lawmakers. He stated that the newly passed legislation will force customers to either spend more money or use illegal platforms.

A DraftKings spokesperson declined to comment on whether the PAC establishment was a result of those issues. Still, he told The Hill that through it, the company hopes to improve the overall experience for players:

“DraftKings’ ultimate goal is to build the best, most trusted, and most customer-centric destination for our players. The recent tax increase in Illinois makes it harder to provide the best service to our players while it simultaneously incentivizes more players to wager in the unregulated, illegal market.”

The spokesperson added that the company is monitoring various policies, including regulatory, tax, and licensing matters, across the country, as well as the expansion of sports betting.

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While it was among the first states to approve sports betting in 2019, Rhode Island chose a one-operator model. Currently, gaming and lottery giant International Gaming Technology (IGT) runs Sportsbook Rhode Island. Its contract expires in 2026.

Senate Bill 748 (SB 748), sponsored by Senate Majority Leader Frank Ciccone, would require the Rhode Island Lottery Commission not to renew IGT’s contract. It would also need to open invitations to potential applicants before IGT’s contract expires. The commission would also ensure all approved operators adhere to regulatory requirements.

The Senate’s 30-3 vote in favor of SB 748 comes on the heels of a Spectrum Gaming Group’s report. The report recommends that the state open the market to four to six sports betting operators.

SB 748 now moves to the House, which has until June 30 to vote on it.

IGT Opposes Rhode Island Bill, DraftKings Praises It

IGT rejects the notion that more operators will bring more revenue to the state. In a Senate testimony, IGT Senior VP, Joe Bertolone stated that the Rhode Island model outperforms neighboring states with multi-license systems.

He added: “This strong fiscal performance is not coincidental; it reflects the benefits of centralized operations, cohesive marketing and product development through committed in-state operating partners. … The data strongly suggests that maintaining the current model is the most prudent course of action to safeguard and grow state revenues.”

IGT noted that it was the only license candidate in 2019. It added that to attract more operators, the state must cut its 51% tax rate, which is among the highest in the country.

However, reducing the tax rate might result in more wagering, but it would not necessarily lead to more revenue for Rhode Island. That’s because the operators would take a higher cut of the handle. According to IGT, the state currently receives $17.44 per person, compared with $9.78 in multi-operator Connecticut.

In contrast, DraftKings believes opening up the market will bring a better experience to the players.

“A marketplace with multiple choices for players leads to a better player experience – operators are forced to innovate, while competing for business.”

According to DraftKings Senate testimony, Rhode Islanders spend $38 per adult resident on sports betting, which is one of the lowest in the country. For comparison, in Massachusetts, that number is nearly double.

Senate Bill 748 Doesn’t Address Key Concerns

Despite strong support in the Senate, SB 748 does not address one key issue: the tax rate. IGT and the Spectrum Gaming study also highlighted that.

The state taxes Sportsbook Rhode Island at 51%. That is tied for the highest rate in the country with New York and New Hampshire. Additionally, the sportsbook incurs a 17% server hosting fee to Bally’s Corporation.

While DraftKings supports SB 748, it’s unknown whether it would pursue a license with such a high rate. While it operates in New Hampshire, DraftKings holds a monopoly in the market.

Lottery Director Mark Furcolo raised another potential issue in a letter to the Senate Committee on Gaming and Labor in April. Furcolo claimed that SB 748 could violate regulators’ constitutional authority to renew gaming contracts. The Lottery Director also added concerns on whether expanding to five vendors is economically feasible.

However, it seems that Furcolo has come round to the idea of more licenses. Last month, he announced that he had informed the legislative committee overseeing the state’s gambling sector that the lottery intends to issue a request for information (RFI) in early 2026.

Still, the potential constitutional issue remains.

The post Rhode Island Senate Passes Sports Betting Expansion Bill appeared first on CasinoBeats.

Escalante wants to buy the remaining 30% share he doesn’t own in a transaction that would value the company at A$3.2 billion ($2.08 billion). The proposed acquisition reflects a strategic maneuver in response to increasing regulatory security and evolving market conditions in the US.

Lance East Office Proposes Acquisition in Major Buyout

For the acquisition, Lance East Office (LEO), Escalante’s family office, has established Ocean BidCo Limited, a special purpose vehicle registered in the Bailiwick of Guernsey.

Under the proposed Scheme Implementation Deed of purchase terms, VGW would become a subsidiary of Ocean BidCo Limited.
Under the scheme terms, VGW shareholders can receive a A$5.05 ($3.29) per share cash payment, shares in Ocean BidCo, or a combination of the two.

LEO initially approached the VGW board about an acquisition in November 2024. The board then created an Independent Board Committee (IBC). IBC, comprising financial and legal advisors, was tasked with evaluating the potential sale.

IBC rejected LEO’s initial offer of A$3.50 ($2.28) to A$4.00 ($2.58) per share. After further negotiations, IBC deemed that the latest A$5.05 offer accurately reflects the company’s value.

The acquisition is subject to approval from VGW shareholders. If conditions are met, the deal is scheduled to finalize by September 15.

Behind VGW Going Private: Navigating Regulatory and Market Pressures

Escalante’s decision to take the company private follows challenges in the US, one of VGW’s core markets.

Sweepstakes casinos, like VGW’s brands, have faced increased regulatory scrutiny in the US, with several states already moving towards a legislative ban on these platforms.

Last month, Montana officially banned sweepstakes casinos, becoming the first state to do so. Meanwhile, Louisiana, Nevada, and Connecticut are just a governor’s signature away from following Montana.

Additional states, such as New York, New Jersey, and Ohio, are also considering legislative bans. In response, VGW has already announced it will stop sweepstakes play in the Empire State, effectively removing it from its list of eligible jurisdictions.

Due to these challenges, industry sources expect a decline in VGW’s revenue for the remainder of the financial year.

Going private and relocating the company’s domicile to Guernsey from Australia will also benefit VGW. It provides it with tax advantages and a more favorable regulatory environment, which could help VGW in achieving greater operational agility and cost efficiency.

Ending VGW Shareholder Disputes By Going Private

Going private will also help Escalante with his ongoing disputes with shareholders over issues such as valuation, company direction, and regulatory challenges.

As CEO and majority shareholder, Escalante has maintained control of the company; however, these disputes have caused friction, including his recent profanity-laced tirade at investors, in which he told them to sell their shares if they did not trust the leadership.

One of the arguments of minority shareholders is that they believe the company is undervalued. They have pushed for higher valuations and liquidity options. Investors have also questioned VGW’s response to US regulatory pressures, calling for more aggressive expansion and diversification.

Escalante’s move to take VGW private is an attempt to resolve these tensions. By offering a higher price per share than the initial valuation, the CEO is answering those calls for undervaluation.

At the same time, going private gives VGW greater strategic flexibility and Escalante greater autonomy, as the company will no longer be beholden to shareholder expectations.

Being private also allows VGW to keep sensitive business information out of the public eye, which is critical in regulated and competitive businesses like online gambling.

VGW’s Position Compared to Publicly Traded Gaming Giants

Escalante’s ongoing disputes spark comparisons with other high-profile shareholder disputes involving publicly traded gambling giants, such as Penn Entertainment, Bally’s Corporation, and DraftKings.

Ahead of its annual meeting, Penn Entertainment is facing severe pressure from shareholder HG Vora Capital Management. HG Vora claims that the company’s misguided pivot to the digital sector, away from traditional retail casinos, has led to a dramatic decline in shareholder returns.

HG Vora also points the finger at CEO Jay Snowden and the leadership team for a lack of skills aligned with the strategy shift.

Bally’s has faced echoing concerns from shareholders about its focus on its Interactive division. Last year, the company agreed to a merger with its largest shareholder, Standard General, led by Chairman Soo Kim. However, another investor, K&F Growth Capital, opposed the merger.

In an open letter to shareholders, K&F questioned Bally’s shift to digital, which it called “an unmitigated disaster.” It also questioned the mass retail expansion plans for casinos in Chicago, Las Vegas, and New York. The latter faces serious questions as it recently hit a roadblock with the New York City Council.

DraftKings is a digital gaming giant that has grown to become the number two sportsbook in the US. Last year was one of its most successful years in terms of financial results, as it reported its first-ever positive Adjusted EBITDA and 30% yearly revenue growth.

However, between 2021 and 2023, the company faced shareholder concerns over its capital allocation strategy. The shareholders raised questions regarding aggressive marketing spending and acquisitions, with concerns about sustainability and the path to profitability.

Investors even brought in a class-action lawsuit regarding the disclosure of information surrounding DraftKings’ merger with its technology provider, SBTech. That suit was eventually dismissed.

Public vs. Private Gaming Companies: Governance, Regulation, and Strategic Flexibility

The key difference between VGW’s potential privatization and the situations at Penn, Bally’s, and DraftKings lies in their governance and regulatory environments.

Unlike VGW, all three are publicly traded companies operating under strict US gaming regulations. They have disclosure requirements to ensure transparency and accountability. This enables shareholders to actively influence corporate decisions, often leading to public disputes when disagreements arise.

In contrast, VGW does not hold US gaming licenses. The company’s plan to go private and relocate to Guernsey further reduces regulatory oversight and disclosure obligations.

That move gives VGW management greater freedom to pursue long-term strategies without the pressure of investor concerns or public market pressures.

VGW’s privatization enables Escalante to consolidate control and lead the company through evolving market challenges with greater agility. That’s something US-regulated, publicly traded companies cannot do.

The post VGW Going Private: A Strategic Move Against US Regulatory Headwinds and Shareholder Disputes appeared first on CasinoBeats.

Michigan Gaming Control Board

Henry Williams has become executive director of the Michigan Gaming Control Board following a 34-1 roll call confirmation vote in the Michigan Senate.

Williams, who has 20 years of experience working at the MGCB and most recently was deputy director for the agency’s casino operations division, was confirmed to a to a six year term, which began on Monday 17 May, by Governor Gretchen Whitmer.

“I am honoured to begin my appointment as executive director of the Michigan Gaming Control Board,” said Williams. “I look forward to leading the agency’s continuing success and thank outgoing executive director Richard Kalm for his leadership and the opportunities he provided that paved the way for my appointment.”

Esports Technologies

Esports Technologies, a global provider of advanced electronic sports wagering products and technology, has announced a new marketing partnership with NBA star Jordan Clarkson of the Utah Jazz.

As a brand ambassador, Clarkson will partner with the firm on marketing campaigns to raise awareness of the brand across digital and social platforms through creative content, various guest appearances and streaming events.

Aaron Speach, CEO of Esports Technologies, noted: “We’re honoured to team up with one of the NBA’s biggest stars as he is enjoying his finest season in the league. Jordan Clarkson’s background, talents and dynamic personality make him an ideal brand ambassador for us. He embodies everything we stand for.

“I’m confident this partnership will likely help us catapult our brand globally, and I can’t thank our strategic advisor Jack McClinton enough for the opportunity to work with Jordan. Together we are building a great team.”

PointsBet

PointsBet has announced that Kosha Gada, a seasoned executive with expertise across media, technology, and digital business, has been appointed by the group’s board as an independent non-executive director,

Gada, the CEO and managing director of Recastled, is a regular contributor on various business and news networks, including Sky News, CNBC, and BNN Bloomberg, as well as publications including Forbes and TechCrunch.

Brett Paton, PointsBet chairman, stated: “I am delighted to welcome Kosha to the Board. Her expertise and strong knowledge of the US media and technology landscape will provide great benefit to PointsBet.

“As we continue to expand into new US jurisdictions, I could not think of a better set of skills to assist the Board as we execute on our strategy. I congratulate Kosha on her appointment and look forward to her contribution.”

DraftKings

DraftKings has announced the appointment of Roy Pollitt as its new Vice President of Regulatory Affairs. He joins the firm from Exiger where he was managing director, head of investigations for the global regulatory and financial crime, risk and compliance company.

Pollitt comes with deep experience of regulation, compliance and security, having also served as a special agent for the FBI for 17 years.

Paul Liberman, DraftKings’ co-founder and president of global product and technology, welcomed the new addition, commented: “I am pleased to welcome Roy Pollitt to the DraftKings team, where he’ll play a critical role leading our US and international regulatory function.

“Roy brings unparalleled experience and a unique perspective to the position, having served both as an expert regulatory consultant to high profile public companies and FBI special agent investigating complex frauds within diverse industries, including banking, gaming, payment processing, and securities.”

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