Summary
- FanDuel will continue to implement its $0.50 surcharge in Illinois.
- This is a reaction to a recently implemented tax on sports betting platforms.
- Flutter, the owner of FanDuel, is prepared to reverse the decision if Illinois eliminates the new tax.
When DraftKings considered implementing a surcharge, it faced swift criticism for its apparent greed. By June 2025, however, FanDuel, which had previously prided itself on not imposing surcharges like some of its rivals (a barely concealed jab), has now introduced a surcharge of its own.
Surcharge is the only way to respond to the new tax in Illinois
Recently, the company has been compelled to introduce a $0.50 surcharge on each bet placed in Illinois due to a new state-imposed tax on sports betting companies. Flutter Entertainment, the parent company of FanDuel—which holds nearly 50% of the U.S. sports betting market—has stated its willingness to remove the surcharge if Illinois reconsiders this tax, either now or in the future. To mitigate the impact of these higher taxes, the company has developed strategies such as reducing marketing expenditures and offering more modest customer promotions. Although Flutter is not pleased about having to implement these measures, it felt compelled to do so after being unable to fully absorb the tax increase. Peter Jackson, the CEO, emphasized the importance of balancing gaming tax rates, stating: It's crucial to establish tax rates that allow operators to deliver the best customer experience, foster market growth, and maximize state revenues over time. The new surcharge will be applied to every bet made through FanDuel's Illinois platform, starting September 1, 2025.
Navigating a market that is increasingly difficult for companies
Increasing taxes is generally associated with a decrease in market competitiveness, making regulated areas vulnerable to losing business to black-market operators. This issue is well-documented in developed European markets. Additionally, companies struggling in key markets may begin requiring customers to place minimum wagers, possibly ranging from $1 to $10. The specifics of these minimums would depend on current market conditions and whether companies can afford the tax burden. Recently, Louisiana has raised its sports betting tax, and more states are considering similar actions.
