DraftKings transaction fee to offset tax headwinds, says Citi

Citi keeps a Buy rating on DraftKings (DKNG) with a $55 price target after the company announced it will implement a 50c transaction fee on all mobile and online bets placed in Illinois. The move comes in response to the recent tax hike announced earlier in the month in the state and follows a similar announcement made by competitor FanDuel earlier this week, the analyst tells investors in a research note. Citi is not surprised by the announcement, and says that with wide industry adoption, the policy will enable DraftKings to offset a large portion of any tax-related headwinds.