12:22 PM EDT, 05/28/2024 (MT Newswires) -- DraftKings ( DKNG ) will see a negative impact from the likely increase of the Illinois sports betting tax, Oppenheimer said Tuesday in note to clients.

On Sunday night, the Illinois Senate has passed a budget that includes a tax hike on sports betting companies, according to media reports. The legislation would make Illinois the second-most expensive state for wagering businesses with a scale that would make the tax as high as 40%, up from 15%, the reports said.

Oppenheimer said it expects the measure to pass State Assembly and start on July 1.

"Assuming stable hold/promo-rates, higher-rate implies a negative ~$38M/~$113M impact to '24E/'25E gross-profit," the note said.

Oppenheimer noted that DraftKings' ( DKNG ) shares were down 9% in the past 10 days, indicating that "some taxation concerns were likely baked-in" to the stock.

The firm said, however, it remains a buyer of DraftKings ( DKNG ) "on any share-pullbacks related to unfavorable legislative outcomes."

The investment firm kept its outperform rating on DraftKings ( DKNG ) and $60 price target.

DraftKings ( DKNG ) shares were nearly 12% lower in midday trading on Tuesday.

Price: 35.30, Change: -5.51, Percent Change: -13.50