Larger and more scaleable operators will be the “big winners” from greater taxation and regulation of the US market according to Tom Waterhouse.

Waterhouse, Chief Investment Officer at, offered these insights when he appeared on the Australian business and financial news channel Ausbiz.

He said: “Taxations, regulations [and] restrictions have increased and the big winners are the ones with scale. You’ve seen Flutter recently listed on the primary listing on the New York Stock Exchange. They’ve been a big winner because they’ve got that scale and global expertise.

“DraftKings also, and then you’ve got the next operators like the Caesars and MGMs. In a highly taxed and regulated market, scale and operation leverage is such a big advantage.”

He also cited Flutter’s takeover of FanDuel as another reason for its success due to the large database of fantasy players that FanDuel has. 

The US market opened up in 2018 when PASPA was repealed and since then 38 states have legalised sports betting and seven have legalised iGaming. 

Earlier this month, Illinois Governor J.B. Pritzker signed the state budget that included a new sliding scale of sports betting tax ranging from 20-40% depending on an operator’s revenue. 

Previously the tax rate had been 15%, and the new top tax rate of 40% will rank as the second highest tax behind New York’s 51% rate.

When the bill was first passed in May shares of DraftKings and Flutter Entertainment dropped by 10% and 8% respectively. 

Efforts were also made to increase the sports betting tax in Massachusetts however the proposal was dismissed by the senate. 

WaterhouseVC is a fund that invests in companies within the gaming industry and at the end of the clip Waterhouse suggests that his company prefer to consider gaming suppliers as they do not take on the same taxation and regulatory risk as operators. 

Scaleable operators “big winners” from greater taxation and regulation in the US