At the helm of Flutter Entertainment, a titan in the realm of online betting, CEO Peter Jackson wades into the turbulent waters of tax discussions with a cautionary stance. Jackson, a seasoned navigator in the industry, suggests that while governments may be eager to dip their hands into the swelling river of online sports betting revenue, a delicate touch is necessary. His proposition? A temperate tax rate of 18% for internet sports wagering across the United States—a sweet spot that neither stifles the flow of business nor encourages bettors to seek refuge in the shadowy havens of unregulated offshore markets.
His rationale roots itself in the Laffer curve—a principle conceived by economist Arthur Laffer. This economic theory posits that there is a peak tax rate that optimizes government revenue, whereas rates too high or too low could lead to a barren treasury. It is this arc of fiscal wisdom that frames Jackson’s Goldilocks analogy: a scenario where tax levies on sports betting are neither so crippling as to smother the industry, nor so lenient as to leave state coffers wanting.
The timing of Jackson’s insights comes at a critical juncture, as Flutter Entertainment, the Dublin-based parent company of FanDuel, America’s largest online sportsbook operator, witnesses an environment where states are increasingly emboldened to adjust their tax take on sports betting operations. Ohio has already taken a leap, doubling their online sports betting tax from 10% to a solid 20%. Illinois, not far behind, has pivoted to a graduated tax system that burdens larger players like FanDuel and DraftKings with heftier taxation than their less colossal competitors. States like New Jersey and Maryland aren’t deaf to these rumblings, as they contemplate tightening their own tax taps.
Jackson’s perspectives resonate in the wake of the Global Gaming Expo in Las Vegas, a conclave of gaming industry mavens, where the buzz was that tax hikes on sports wagering seemed not a matter of ‘if’ but ‘when.’ New Jersey, in particular, was spotlighted as a likely candidate for such increases. Robert Stoddard of KPMG contends that sports betting taxes might tread the path previously carved by sin taxes, with states confident in their ability to squeeze harder without dampening consumer enthusiasm.
Yet Flutter remains resolute in its stance. As quarterly results unfurled in August, Jackson openly challenged Illinois’s progressive tax model, signaling a warning to other states that might be considering similar paths or across-the-board tax hikes. Such measures, he suggests, only serve to chase bettors into the arms of black market bookies.
For operators, taxes are a thunderous tide to navigate. Jackson argues that larger firms may have the resources to weather the storm, to absorb and offset higher costs, but smaller players could find themselves capsized. And what of the bettors themselves? They too are barometers of change, sensitive to the forecast of promotions and incentives. FanDuel’s New York clientele is a case in point, crossing state lines into New Jersey where more generous perks can be found, all thanks to lower tax-induced costs.
In a world where the balance between public coffers and private enterprise is perennially at play, Jackson’s call to calibrate sports betting taxes with precision underscores a common quest: to ensure the waters of economic prosperity can carry all boats, government and business alike, toward a horizon of mutual benefit.
