Craig-Hallum ups Rush Street target on benefits from Illinois tax bill

Craig-Hallum raised the firm’s price target on Rush Street Interactive (RSI) to $11 from $10 and keeps a Buy rating on the shares. The Illinois Senate approved an increased and progressive tax on online sports betting from a flat 15% to 20% – 40% tiered rates, which is an industry negative, the analyst tells investors in a research note. However, Rush Street is “insulted and a beneficiary,” says the firm. Hallum believes the progressive nature of the tax creates the biggest incremental burden on the leaders, DraftKings (DKNG) and Flutter Entertainment’s (FLUT) FanDuel. The progressive tax system impacts the smaller operators less and should create more favorable competitive dynamics relative to FanDuel and DraftKings, contends the firm.