DraftKings is proposing a new surcharge on winning bets to counter New York’s steep 51% tax on sports betting revenue. CEO Jason Robins revealed this plan during the company’s second-quarter earnings call, suggesting the surcharge as a “reasonable solution” starting January 1, 2025, in four high-tax states, including New York.
The proposed fee would apply to net winnings in states where tax rates exceed 20% and are expected to be minimal for customers. While DraftKings sees this as a strategic move, the proposal has faced criticism from bettors and investors. Fantasy Advocates for New York Sports, a group supporting expanded daily fantasy sports, criticized the plan, especially after DraftKings announced significant profits and a share buyback.
The New York State Gaming Commission is reviewing DraftKings’ proposal as it evaluates the potential impact on the state’s betting market, which currently imposes the highest sports betting tax in the country.
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