Surcharges from DraftKings
- Thread starter MrTop
- Start date
blueline
EOG Master
DraftKings announces Tax surcharge starting in 2025.
DraftKings plans to implement a gaming tax surcharge in "high tax" states that have multiple mobile sports betting operators on January 1, 2025; few more specifics about such tax announced in $DKNG earnings statement; likely states would include NY, IL, PA, among others
Beginning Jan. 1, 2025, New York, Illinois, Pennsylvania and Vermont will see a roughly 2-to-5% online betting surcharge. The timing coincides with the lucrative NFL playoffs.
The fee will be tacked onto winning bets only.
DraftKings CEO and co-founder Jason Robbins said of the surcharge: “It’s really fairly nominal, and it makes a huge difference in our ability to make a reasonable margin and also, more importantly, to compete with the illegal [online sports betting] market, which pays no taxes and can invest 100% of their revenue into product and other things. To be competitive with the illegal market and invest properly in product and customer experience in a state with a very high tax rate, we feel it is an important step that consumers will ultimately understand.”
The company believes other states may be cautious about raising taxes on the online sports betting industry because of the surcharge and costs falling on players.
Some Response
The impact of the surcharge will not be apparent to consumers until they place a bet. Rather than factoring the surcharge into the betting odds, DraftKings informs consumers later in the gambling process via their bet receipt.
The appearance of a surcharge could turn off some consumers more than worse betting odds. So-called recreational gamblers aren’t very sensitive to the odds.
Upstart or smaller online sportsbooks hoping to beat DraftKings on pricing could be disadvantaged. DraftKings commands roughly a third of the state-sanctioned U.S. online sports betting market, with the industry existing as a war of attrition.
It’s not immediately clear if DraftKings would be legally able to implement the proposed surcharge in some states. Some gambling regulators could block the fee.
The fee will be tacked onto winning bets only.
DraftKings CEO and co-founder Jason Robbins said of the surcharge: “It’s really fairly nominal, and it makes a huge difference in our ability to make a reasonable margin and also, more importantly, to compete with the illegal [online sports betting] market, which pays no taxes and can invest 100% of their revenue into product and other things. To be competitive with the illegal market and invest properly in product and customer experience in a state with a very high tax rate, we feel it is an important step that consumers will ultimately understand.”
The company believes other states may be cautious about raising taxes on the online sports betting industry because of the surcharge and costs falling on players.
Some Response
The impact of the surcharge will not be apparent to consumers until they place a bet. Rather than factoring the surcharge into the betting odds, DraftKings informs consumers later in the gambling process via their bet receipt.
The appearance of a surcharge could turn off some consumers more than worse betting odds. So-called recreational gamblers aren’t very sensitive to the odds.
Upstart or smaller online sportsbooks hoping to beat DraftKings on pricing could be disadvantaged. DraftKings commands roughly a third of the state-sanctioned U.S. online sports betting market, with the industry existing as a war of attrition.
It’s not immediately clear if DraftKings would be legally able to implement the proposed surcharge in some states. Some gambling regulators could block the fee.
Sportsrmylife
EOG Master
This is perfect for draftkings.
The people they don't want will simply avoid them.
The people they do want don't care
Their stock is a buy since football season is here and their profit margin is one of the best in the industry
The people they don't want will simply avoid them.
The people they do want don't care
Their stock is a buy since football season is here and their profit margin is one of the best in the industry
Neveragain
EOG Dedicated
Always a good idea for sports betting operators in the USA to study the regulations history in Europe.
Many European countries have been regulated for many years now and the landscape has been evolving.
Long story short, gambling addiction is growing and sports books are being blamed for everything.
The Books are facing more and more government regulation and it’s become a issue of public policy to better protect
the health and safety of the gamblers.
There are several safeguards either written into law now or soon will be.
1. The UK government has now limited or forbidden credit card deposits to fund betting accounts.
2. The deposit bonuses are characterized as pure evil and must be eliminated.
3. More funding for gambling addiction treatment to be funded by the Books is the morally right thing to demand.
Draft Kings should’ve been paying closer attention to the European experience.
The last thing they need is for state regulators holding their feet to the fire to protect their customers.
Good (new) documentary here.
Many European countries have been regulated for many years now and the landscape has been evolving.
Long story short, gambling addiction is growing and sports books are being blamed for everything.
The Books are facing more and more government regulation and it’s become a issue of public policy to better protect
the health and safety of the gamblers.
There are several safeguards either written into law now or soon will be.
1. The UK government has now limited or forbidden credit card deposits to fund betting accounts.
2. The deposit bonuses are characterized as pure evil and must be eliminated.
3. More funding for gambling addiction treatment to be funded by the Books is the morally right thing to demand.
Draft Kings should’ve been paying closer attention to the European experience.
The last thing they need is for state regulators holding their feet to the fire to protect their customers.
Good (new) documentary here.