Flutter Entertainment plc (NYSE:FLUT) is one of the stocks on Jim Cramer’s radar. Cramer mentioned the company during the episode and commented:
“Take the sports betting space, one of the fastest-growing industries in America over the past few years, dominated by DraftKings and Flutter Entertainment, the parent of FanDuel. There was an obscure provision in the Big Beautiful Bill added late in the process that seems like it could impact these companies significantly… Once the bill was signed into law by President Trump on the 4th of July, people finally started asking what this new rule means for the gaming industry, especially the popular online sportsbooks like DraftKings and FanDuel that dominate the business… But you know what? Since the Senate unveiled its version of the budget bill in mid-June, the version that included the change to the gambling taxes, the stocks of DraftKings and Flutter have been roaring…
Flutter was up 13% and they’re both basically flat in July when people started focusing on this issue. So what the heck is happening here with this taxation thing?… Basically, the new taxation is very bad for professional gamblers or anyone who knows how to win reliably. But those are the last people FanDuel or DraftKings want. In fact, if the budget bill puts these people out of business, it might actually be a good thing for the online sportsbooks… Of course, there’s another reason why Wall Street doesn’t seem to be worried about this change in taxation for gambling winnings. There’s a very good chance it might be reversed…
DraftKings and Flutter haven’t even bothered to push back against the new provision. And historically, these companies are very, very vocal about any legislation that hurts their business. I don’t think they’re shedding any tears over this tax provision that drives away gamblers who win too often. We reached out to both DraftKings and Flutter Entertainment for a comment here… So far, Flutter hasn’t gotten back to us…
Ultimately, I think this is something we need to watch, but it doesn’t change my bullish attitude toward DraftKings and Flutter. The thesis here is very simple: These two companies have emerged as an effective duopoly in online sports betting… This law just makes the moat even bigger for them. There’s building growth to these stories because of the gradual state-by-state rollout of legal sports betting…
Also, because the industry is a lot less competitive than it used to be, DraftKings and Flutter no longer need to offer big incentives to draw new customers, making them more profitable… Here’s the bottom line: I still like DraftKings and Flutter, but more important, this is just one tiny example of the work that’s being done all across Wall Street to figure out the impact of this massive new budget bill. Some of it’s straightforward, but like we saw with sports betting, sometimes these new rules might do the opposite of what you’d expect.”
A digital kiosk showing the diverse range of sports betting options available.
Flutter Entertainment plc (NYSE:FLUT) operates a portfolio of global brands that provide sports betting, online gaming, fantasy sports, poker, and lottery services across digital platforms. The company also hosts live gaming events and provides B2B risk management and pricing solutions.
While we acknowledge the risk and potential of FLUT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FLUT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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