DraftKings Facing Backlash For Charging More In New York State

Here in New York, it’s rare these days to be watching a football, hockey, or basketball game with friends without people being on their phones (to be fair, it’s rare to do anything these days without that happening). But in 2024, if it’s during a sporting event, we can almost guarantee that one of those phone users is peeking at their favorite sports betting app. 

New York State was kind of late in the game when it came to legalizing sports betting on mobile devices and smartphones, but soon after it became legal in the Empire State in 2022, the Albany Times Union reported that over $1.17 billion was bet by users on apps in the first three weeks alone. 

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Clearly, these sites have their fans, and it’s easy to see why. Popular betting apps are pretty easy to learn, and once you get the hang of it, they can be a lot of fun; especially if your friends are using them too (and as long as everyone is using them responsibly and betting within their means).

Not to mention they’re a lot safer than the days of placing bets with shady bookies in seedy places with the threat of violence if you don’t pay up. 

But one of the most popular ones has revealed plans that have New York State users of the app up in arms. 

Popular Sports Betting App Could Charge Fees For Bets

DraftKings, one of New York State's most popular mobile sports betting platforms, recently told its investors that beginning this January, it’s planning to introduce a new “surcharge fee” on winning bets in order to offset the state's very high 51% tax rate; the highest rate in the U.S.

(Comparatively, the state of Nevada, arguably one of the most gambling-friendly states in the country, has a sports betting tax rate of merely 6.75%.)

DraftKings CEO Jason Robins said the goal of the fees is to lower the "effective tax rate” and improve the company’s profit. Robins also added that other sports betting companies (FanDuel, Caesars Sportsbook, etc.) may also begin to charge fees for winning bets. 

"I think every company has to do what's best for their own business." - Jason Robins, DraftKings CEO

Although Robins said the surcharge/fee would be likely “in the single digits,” the move has sparked controversy among the app's users and critics. 

Several users took to social media to complain about the potential increase in price. However, there are some that are in favor of DraftKing’s move. Taylor Caby, co-founder of the betting analysis site Establish the Run, believes the majority of the blame lies on New York and other states with high tax rates, telling ESPN: 

"I'm not saying people should support it, but I am saying that if you do care about price as a bettor, you should also care about tax rates."

Although the plan was to implement the new surcharge for winning bets in January, DraftKings still needs the approval of the New York State Gaming Commission to move forward, and they’re still reviewing the matter.