Gambling stocks dropped significantly early in the week, with DraftKings down 10.29% and U.S.-traded shares of FanDuel parent Flutter Entertainment down 7.73%.

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This followed the Illinois Senate's budget approval, which includes a progressive tax increase on sports betting based on company revenue.

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To the chagrin of sportsbooks operators like DraftKings ($DKNG) and FanDuel (FLUT), among the increases is a staggered increase on the sports wagering tax, ranging from 20% to 40% dependent on their annual revenues.

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The revised plan, originally calling for the rate to jump from 15% to 35%, is still expected to collect the same $200 million in additional revenues for the state.

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Overall, the approximately $350 million expected from the bumped tax will go to state coffers and capital projects.

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Jeremy Kudon, president of Sports Betting Alliance, an organization representing sportsbooks nationwide, cast a gloomy picture on its impact.

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