DraftKings Trading Volume Surges to 81st Rank Despite Stock Price Drop Amid Illinois Tax Hike

On June 2, 2025, DraftKings (DKNG) saw a significant increase in trading volume, with a turnover of $851 million, marking a 137.71% rise from the previous day. This surge placed DraftKings at the 81st position in terms of trading volume for the day. However, despite the high trading volume, the stock price of DraftKings fell by 5.99%.

The decline in DraftKings' stock price can be attributed to the recent passage of new tax legislation in Illinois. The state's legislators approved a $55 billion balanced budget, which includes an $800 million increase in taxes. This new legislation introduces a progressive tax rate on sports betting revenue, ranging from 20% to 40%, replacing the previous flat 15% rate. Additionally, a new per-bet tax of 25 cents has been implemented, which is expected to significantly impact major sports betting operators like DraftKings.

Analysts have estimated that this new tax could result in a low to mid-single-digit reduction in adjusted EBITDA for DraftKings in the fiscal year 2025. The Citizens Bank team, for instance, projected that DraftKings could face a $79 million hit, or 5.4% of EBITDA, in 2026 due to the Illinois tax. This unexpected tax increase comes after Illinois had already raised taxes for DraftKings and other operators from 15% to around 35% last year.

The new tax structure is expected to push effective tax rates above 50% for top sportsbooks, making it more challenging for companies like DraftKings to maintain profitability in the Illinois market. The progressive tax rate and the per-bet tax are designed to generate additional revenue for the state, but they also pose significant financial challenges for sports betting operators.