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00:00 Illinois has been a hot button topic, Sam, on this show all week long because of the
00:07 announcement that was made the legislature passed a new tax rate of 40% as we've discussed
00:12 with a lot of folks here on the show.
00:14 And I would ask you the business side to that is really the next question and the next intriguing
00:19 part of the conversation.
00:20 Because a lot of the sports books, they cry and complain, this is too high of a tax rate
00:24 and we're going to pull out and we're going to lose business and our stock is going to
00:27 go down.
00:28 But inevitably, Sam, they're still going to make so much money.
00:31 So I don't get what that's all about.
00:34 Well, I think anytime you have a tax raised on you, you're going to be upset about it.
00:39 I don't think anyone, if I can remember, has ever been in favor of raising taxes on themselves.
00:44 Certainly not these big public companies like Flutter, which owns Vandal and DraftKings.
00:48 And to your point about stock being impacted, the stock market definitely reacted yesterday.
00:53 You saw both of those companies dropping, which is kind of abnormal considering they
00:58 were doing pretty well so far this year.
01:01 But some estimates have come out that said this tax hike, which is effectively 140% hike,
01:06 you're going from about a 15% rate to 36, 37, 40 in some cases based off the new system.
01:12 Some people are estimating it's going to cost companies roughly $94 million a year.
01:17 Now, that's that would be as if they were doing business as normal.
01:22 They're certainly not going to lose that much money from this.
01:25 What you should see is I'm trying to shift the costs around.
01:28 Jason Robbins, the CEO of DraftKings, has been very vocal, as other operators have been,
01:34 about it being passed down to the customer.
01:37 We've yet to see in places with even higher tax rates like New York, the odds being impacted.
01:42 I live in New York.
01:43 I certainly don't notice huge vigs compared to other states.
01:48 Sports books have kind of talked about that in the past.
01:50 What you'll probably see is less promotional spend in Illinois.
01:54 The other takeaway here that's really big is this is supposed to be good for the smaller
01:58 operators, places like Rush Street, which operates Bett Rivers, Penn, which used to
02:03 operate Barstool, obviously now does ESPN Bett.
02:06 They'll probably pay a lesser tax because they don't make as much revenue per year.
02:13 It's kind of a win for the smaller operators with the big ones coming out and saying, "Oh,
02:16 we really hate this.
02:17 We wish you didn't do this."
02:18 But to your point, they're still going to be there.
02:20 They're still going to operate.
02:21 They're still going to make money.
02:22 They're still going to have to kind of find out new ways to do it even better.
02:26 And because Illinois is such a big state, yeah, it could get away with this versus a
02:28 state like Wyoming, which probably won't be hiking taxes anytime soon.
02:33 But it will be interesting to see how they react.
02:34 It will be interesting to see if the smaller operators all of a sudden get a boost in market
02:38 share or kind of what I think is going to happen.
02:41 The story is just going to play out as it usually does.
02:42 And you have the same two giant sports books on top.
02:45 They'll just figure out a different way to do it.
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