DraftKings U-turns after FanDuel confirms no plans for surcharge
The operator had announced that it would introduce surcharges to players in states with a tax rate 20% or higher beginning January 1.
In a conference call following its release of second quarter financial results, Flutter CEO Peter Jackson explained that the company would not implement a winner’s surcharge on FanDuel sportsbook, of which Flutter owns the vast majority.
Now, DraftKings sportsbook has released a statement saying it will be going back on its recent announcement regarding the implementation of surcharges on high-wager bets.
“We always listen to our customers and after hearing their feedback we have decided not to move forward with the gaming tax surcharge. We are always committed to delivering the best value in the industry to our loyal customers,” DraftKings said in its statement.
The operator had announced that starting January 1, 2025, players in states with a tax rate that is 20% or higher would have been subject to an additional surcharge. The DraftKings’ changes would have affected players within the New York, Illinois, Pennsylvania and Vermont markets.
Jackson stated that player retention is becoming more prevalent for sportsbooks, having said, “The lifetime value of customers is becoming more important over time.
“It’s important to look at the business you have and see where you can reinvest to find opportunities for growth and product enhancement.”
Rush Street Interactive CEO Richard Schwartz had also come out to say his company would not be implementing any player surcharges, and remains committed to a “customer first approach.”
“As we put our customers first, it was an easy decision for us. RSI remains committed to maintaining its leadership position in the industry by continuously prioritizing the needs and preferences of its players. We believe that RSI’s focus on customer satisfaction, coupled with its innovative rewards and loyalty programs, sets a benchmark for excellence in the online gaming industry,” Schwartz said.
The decision by DraftKings had been heavily motivated after the Illinois General Assembly passed a spending plan that would increase taxes on revenue from operators like DraftKings and FanDuel in June. The proposal includes a tax scale that tops out at 40%, which is a significant increase from the previous tax percentage, a flat rate of 15% across the board.
In response, DraftKings and FanDuel both stated that it may have to “re-evaluate” its operations in the state.
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