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On Monday, Citi analysts reaffirmed their Buy rating for Flutter Entertainment Plc. (FLTR:LN) (NYSE:FLUT), maintaining a price target of £250.00. The decision comes as Illinois lawmakers have approved an additional tax on online sports betting, which is set to take effect on July 1, 2025.
The new tax introduces a $0.25 charge on each of a licensee’s first 20 million wagers in a fiscal year, increasing to $0.50 for each subsequent wager. According to Illinois state data, this tax would have impacted FanDuel’s online sports betting handle in Illinois by approximately 1.6% between April 2024 and March 2025, equivalent to around $74 million.
Citi analysts noted that the tax could result in a 6% impact on Flutter’s estimated U.S. adjusted EBITDA for fiscal year 2025, and a 2% impact on the group’s overall adjusted EBITDA, before any mitigation efforts. Historically, Flutter has been able to mitigate about 50% of the impacts from tax changes.
The analysts also highlighted that following the increased tax regime implemented in Illinois in July 2024, Flutter may have already reduced its focus on the state. This strategic adjustment could help the company manage the financial impact of the new tax.
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