DraftKings Inc ( DKNG ) shares are trading lower Tuesday morning after the Illinois Senate approved a 2025 budget that includes a sports betting tax hike.

What To Know: According to several reports, the Illinois senate approved new tax increases over the weekend that would more than double the current tax rate.

Sportsbooks in Illinois are currently paying an effective tax rate of about 15%, but the new tax increases would see that number jump into the mid-to-high 30% range. The bill is expected to move through the House and become effective at the beginning of July.

The news comes after The Washington Post reported last week that legislators in Illinois and New Jersey were considering proposals to double taxes on sportsbooks, citing the industry's explosive growth and concerns about increased problem-gambling service needs.

Ohio became the first state to double sportsbook taxes last year. New York currently has a 51% tax rate on sportsbooks, which has allowed it to collect revenues of approximately $1.9 billion over the last three years, prompting others to try out a similar playbook. Current sportsbook tax rates range from 6.75% in Iowa to 51% in New York and New Hampshire.

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DKNG Price Action: DraftKings ( DKNG ) shares were down 6.84% at $38.02 at the time of publication, according to Benzinga Pro.