Flutter braces for New Jersey tax impact

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Jefferies Equity Research analyst James Wheatcroft has predicted Flutter could take a significant hit from New Jersey’s proposed increase in igaming and sports betting tax.

As proposed by Gov. Phil Murphy, the next New Jersey state budget would elevate taxes on igaming and sports betting to 25%. Currently, the levies are 15% for igaming and 13% for online sports betting.

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Noting New Jersey’s historical significance as the first US state to legalize both forms of online gambling, Jefferies Equity Research analyst James Wheatcroft wrote that “investors may now expect other states to follow suit to the 25% tax level.”

Citing previous earnings guidance from Flutter Entertainment, parent of FanDuel, Wheatcroft quantified the first-year impact of the tax boost, if passed, at 20 to 50% of cash flow. 

The Jefferies analyst observed that the goal of the proposed impost would be to raise US$400 million in the 2026 fiscal year. Of that sum, US$320 million is to come from igaming, the remainder from sports wagering.

Wheatcroft continued that this would cost US$106 million to Flutter, US$55 million from sports betting and US$51 million from igaming. That would be 6% of Flutter’s US cash flow for the 2026 fiscal year, per current estimates.

Flutter, he projected, would pass the increased cost along to customers. “Mitigation tools available include reductions in free bet and marketing spend as well as offering less favorable odds to consumers.”

In closing, Wheatcroft estimated that BetMGM co-parent Entain would take a 31% hit on its 2026 cash flow. He projected that it would have to fork over US$54 million of its igaming take to New Jersey, along with US$8 million of its sports betting revenues.