The newest headline in the regulated sports betting market is not a positive one according to customers. Just last week, DraftKings announced they will be adding a “winnings surcharge” in high-tax states, in order to offset what they call “the cost of doing business”. Give me a break. This is strictly about profits.
There are currently four states who will be immediately impacted by the charge when it goes into effect on January 1st, 2025. The unlucky states are Pennsylvania, New York, Illinois, and Vermont. The change essentially charges a tax on winning bets in those states. Now it really isn’t that much, but it is enough to adjust the odds to a bet. For example, DraftKings CEO, Jason Robbins, stated “If you made a $10 bet to win $20, you would pay like 30 cents”.
DraftKings is adding a tax to winning bets in 2025
Winning Surcharge Added
The fee comes out to roughly 3-5% on each winning bet, which will certainly add up in the long term. The biggest question amongst the regulated market is will other sportsbooks, most notably FanDuel, follow suit with a tax of their own. Robbins had some choice words about the tax, and they were a bit upsetting to a bettor in the market. On an earnings call, Robbins stated, “People may gripe about it, but I don’t really see behavior change because of it.” I think he just called his consumer’s addicts.
He’s banking on people being too into spots gambling to care about paying 4% on each winning ticket. It’s absolutely absurd in my eyes, and certainly enough to abandon that sportsbook. The lines are better at BetOnline anyways. Assuming other regulated books don’t follow these dance steps, I could see this negatively impacting DraftKings in the long run. If every +100 bet automatically turns to -103, I can certainly find a sportsbook that doesn’t charge a tax.
DraftKings is certainly a trailblazer in the regulated industry, but this is a big jump backwards in my opinion.
Will Other Sportsbooks Follow the Trend?
No other big name, regulated sportsbook has announced any sort of tax surcharge at this point, but all eyes will be on them. I expect them to sit back and see how bad the DraftKings backlash is before joining them, however, this “pay to play” fee could become a regular annoyance. We’ve already seen this on X, where Elon Musk charges people for his blue checkmark, promising extra bumps in the algorithm if users pay up. This is essentially DraftKings implementing their own “convenience fee” to cover a portion of their taxes in certain states. Anything to increase profits.
So far, no other sportsbook has hinted at joining DraftKings in charging this tax, and we certainly won’t ever see it in the worldwide sportsbooks. There are hundreds of options of sportsbooks out there, and they should be competing for your business, just like any other competitive industry. Charging a tax like this is a slap in the face to customers, and the fact that the CEO thinks the general public will be on board is insane. Odds on books like DraftKings are already terrible enough, charging a tax on winnings on top of that is a terrible marketing move. Ultimately I think this hurts them in the long run.
If other sporsbooks follow this trend, the market will shift back into unregulated territories.
Are There Other Betting Options?
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Be sure to sign up and make the most of your next deposit! The shift in the market since the repeal of PASPA is quite interesting. Everyone was betting these “unregulated” markets, since it was only legal in Las Vegas. Since 2018, states have shifted and consumers are now using more and more regulated book makers to place their wagers. As players get limited and taxed higher on winnings, we all will shift back to the books that started it all.
What Can You Do?
Expand your sporsbook arsenal. Sign up for all the books listed above, shop lines as much as you can, and help yourself make more money in the long run. This is a marathon, and pennies add up after time, so it’s important to always get the best number possible, and the most money for your winnings. Stand up against DraftKings, like me, and start betting elsewhere!
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