Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Surprise Tax Increase in Illinois
Barry Jonas of Truist Securities reviewed Illinois’ decision to increase sports betting taxes over the weekend. “Illinois surprised the industry with another proposed sports betting tax increase in its FY26 budget,” Jonas wrote on June 1. “This follows last year’s unexpected increase. OSB operators must pay a $0.25 levy on the first 20 million wagers and $0.50 thereafter. The governor is likely to sign this measure, making the new tax effective on July 1.” Learn more about how states are handling sports betting regulation. The impact will affect DraftKings and Flutter due to their existing high 51% OSB rate in New York and New Hampshire. Investors will focus on strategies to mitigate the impact, such as promotions, surcharges, minimum bets, and evaluating long-term iGaming potential.
OSB Hold Increases in New York
Jeffries’ David Katz reported an increase in the New York online sports betting hold. Katz noted, “Statewide New York OSB hold increased approximately 320 basis points week-over-week to 13.1%, the best since September.” Most operators experienced an increase in hold percentages, except Bally’s, ESPN, and Resorts World, who saw declines of around 340 basis points, 340 basis points, and 400 basis points, respectively. Flutter led the GGR market with a 42% share, while DraftKings followed closely at 34.1%. For the quarter-to-date, Flutter averaged an 11.2% hold, compared to DraftKings’ 9.6%. You can find further insights from industry experts on Legal Sports Report.
Las Vegas Strip Gaming Performance
A report by Truist’s Jonas on May 28 highlighted the Las Vegas Strip’s gaming downturn in April, a decrease of 3% year-over-year due to unfavorable Nevada slot accounting. However, baccarat GGR improved by 41% year-over-year, with slots and table game metrics showing growth. Slots and tables had handle increases of 2% and 6% respectively. Local performance improved by 3% year-over-year despite headwinds. Overall visitation declined by 5%, though convention attendance rose by 14%. Revenue per available room and average daily rates increased by 4% and 5% respectively, despite the year’s slow start. Regional gaming trends remained relatively strong, with a 3% year-over-year same-store increase for April.
