Morgan Stanley says Illinois sports betting tax hike puts overhang on DraftKings

Morgan Stanley notes that the state of Illinois held budget negotiations over the long weekend and that the Senate approved a budget for the year including a revised framework for a sports betting tax hike. While stating that DraftKings (DKNG) has levers to help offset headwinds, such as reduced promos and marketing, the outcome likely creates an overhang on DraftKings and peer Flutter Entertainment (FLUT) in the near-term given that it raises concerns of other states potentially following suit, the analyst tells investors. Morgan Stanley has an Overweight rating and $51 price target on DraftKings shares.