DraftKings needs YOUR money to pay THEIR taxes UPDATE: They were just kidding
In their Q2 earnings report, DraftKings announced that starting 1/1/2025 they’re going to respond to high state taxes, by skimming off the top of your winnings. It may sound like I’m exaggerating, but this has been widely reported:
Starting January 1, it will implement a gaming surcharge on winning bets in states with multiple betting operators and where the tax rate is above 20%.
So what does this mean? Well, if you’re betting in a state that taxes them more than 20%, you don’t get to win as much on a bet. I live in Illinois, a state that will be impacted with a 3.2% surcharge:
From the DraftKings CEO: “If you made a $10 bet to win $20, you would pay like 30 cents”
He makes it sounds like such little money, but since they’re not the only game in town, let’s look at this. If the odds are +100 across Circa, BetRivers, etc, you’d get paid $100 for $100 bet that wins. You’d get $96.80 from DraftKings. You’re paying for the privilege of using their site. Maybe they offer us some +180 3 Team NFL Teasers and I’ll forget about the 3.2% of my money they’re getting. Until then, they can get fucked.
However, it seems that their counting on this becoming the norm and that’s something we’ll all need to watch for:
“We decided that the best course of action is to do what really every other industry [does] — whether it’s hotels, taxis — whatever else you buy generally has some kind of tax,” DraftKings CEO and co-founder Jason Robins.
Two things about this quote:
- It is a pretty large bet that all other books will follow suit and normalize this practice
- Consumers all hate this practice in the industries listed. Hey, everyone else does this thing you can’t stand, we’re gonna too.
If you think of this as a choice in terms of how they can treat their customers, rather than the tried and true “the customer is always right”, they chose Shannon Hamilton’s:
I’m already seeing emails like this, so it may not be going the way they think it will:
What I really don’t like is that they’re trying to do this under the guise of pushing out the illegal market. That is a wild statement to make and Sammy P’s response is on point:
I was elated when states began legalizing sports betting. Having been robbed by numerous off-shore books over the years. We talked about this with Sammy years ago:
Even with that type of history and my support of legalized gambling, DraftKings is making me think about this. If books start skimming off the top of your winnings, there becomes a point at which the risk of off-shores is outweighed by money coming off the top of your winnings at the legal books.
And if you read all of this and thought the taxes are the core issue, it’s not like DraftKings had no idea that the taxes would be high from all the states they’re mad about.
DraftKings is wading in the pool of an extremely profitable business. They can figure out how to make money without taking it from me and you, WHEN WE WIN!
UPDATE
DraftKings released this statement on their Twitter account:
So basically, they were just kidding
-Chorizy-E
About The Author
chorizy
Section 108 Row 13, Bassist for Barren Plains, Acclaimed drunkard