DraftKings Surcharge Raises Alarms Over the Future of Sports Betting
Betbash--
DraftKings’ recent decision to introduce a surcharge on winning bets in states with high sports betting taxes sparked significant controversy at Bet Bash, a sports betting networking event held at Circa. The surcharge, which was announced by DraftKings CEO Jason Robins on August 1, will see a 3.2 percent deduction on winnings in states like Illinois, where sports betting taxes recently jumped from 15 percent to 40 percent. Notably, DraftKings does not operate in Nevada.
Under this new plan, a standard bet of $11 to win $10 would now only yield $9.68, a move that drew sharp criticism from both professional bettors and bookmakers at the conference. Alan “Boston” Dvorkis, a veteran professional bettor, strongly advised against betting with DraftKings under these conditions, stating:
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“If anyone bets where DraftKings is taking 3.2 percent off the winnings, you’re out of your mind. You’re not going to win. There’s no one who can overcome that.”
This surcharge effectively raises the required win rate for bettors from 52.4 percent to 53.3 percent in order to turn a profit, a significant increase that could deter many from using the platform.
The Return to Offshore Betting
Billy Walters, widely regarded as the most successful sports bettor of all time, warned that such practices by DraftKings are likely to push bettors back to offshore sportsbooks. He commented:
“What they’re charging now is just going to drive people right back to offshore sportsbooks. The offshore market is going to grow bigger than ever.”
DraftKings plans to implement similar surcharges in states with tax rates exceeding 20 percent, including Illinois, Pennsylvania, Vermont, and New York, where the tax rate is a staggering 51 percent. In contrast, Nevada’s tax rate stands at a much lower 6.75 percent.
