Summary
- DraftKings has followed FanDuel's lead by introducing a betting surcharge in Illinois.
- The proposal was previously introduced but was eventually withdrawn due to widespread criticism.
- Both companies are moving forward as a new tax is being implemented in Illinois.
Illinois has successfully increased the tax rate for sportsbooks. Consequently, sportsbooks are now passing some of this cost onto their customers. While they usually respond by reducing odds or offering fewer promotions, in Illinois, they are also directly charging bettors.
New tax will be mitigated by passing it onto the customers
FanDuel has announced that due to a recent tax increase, the company can no longer cover these additional tax expenses and will implement a $0.50 surcharge on every bet starting later this year. Although this move was initially mocked when DraftKings suggested it, both companies are now taking this step together. DraftKings CEO and Co-Founder Jason Robins explained the necessity of this change, emphasizing Illinois's significance to their growth. He expressed pride in their contributions to the state through tax revenue, job creation, and investments in responsible gaming initiatives. Similarly, FanDuel CEO Peter Jackson expressed his disappointment over Illinois policymakers' decision to effectively triple the tax in just two years, forcing them to pass the surcharge onto customers.
Surcharge coming for sportsbooks- but now for the players, too
The new law requires sportsbooks to pay a $0.25 surcharge on the first 20 million wagers placed on their platforms and $0.50 on any bets beyond that. However, this may lead to dissatisfaction among bettors, who could find the local market less attractive and seek offshore alternatives. DraftKings and FanDuel are passing this tax on to their customers but have both indicated a willingness to remove the surcharge if Illinois decides to change its policy.
