No Other Sportsbooks Following Controversial DraftKings Surcharge Yet
The news that took the sports betting world by storm last week was the DraftKings decision to add a surcharge on sports betting wins in markets with high tax rates. In response, Rush Street Interactive (RSI) has announced no plans to implement a surcharge of its own. RSI runs operations for sportsbook brands, including BetRivers. The company confirms its decision to remain a “customer first” entity.
Circa Sportsbook tweeted it would not be adding a surcharge to winning bets, too. Meanwhile, BetMGM and Caesars made no mention of any surcharge plans on recent earnings calls.
RSI Response Following DraftKings Surcharge Tax
The surcharge tax is DraftKings’ response to higher tax rates in New York, Illinois, Pennsylvania, and Vermont. Any market with more than a 20% tax rate will see the surcharge tax applied to winning wagers beginning Jan. 1. BetRivers is in three of those markets (New York, Illinois, Pennsylvania) and suffers from the same higher tax rates. However, RSI is electing not to go down the same path as DraftKings.
“As we put our customers first, it was an easy decision for us,” said Richard Schwartz, CEO of RSI.
It is important to note that Illinois has a progressive tax rate. The more adjusted gross revenue an operator sees, the higher the tax percentage. DraftKings sees the highest tax of 40% in Illinois as it grosses the most in AGR.
Circa Sports Also Has No Plans For Surcharge
RSI is not the only entity to state it has no plans to implement a betting surcharge like DraftKings. Following the news, Circa Sports Director of Operations Jeffery Benson was asked about it on his X account. He confirmed Circa has no current plans for a surcharge.
DraftKings Share Price Drops Following Surcharge News
DraftKings is currently the only operator planning to implement the surcharge. The response to the company’s decision has been overwhelmingly negative. Not only have fans voiced their dislike of the idea online, but DKNG shares are down around 15% since the announcement. Even with the blowback, however, it appears DraftKings will commit to seeing the surcharge through.
“As of now, I don’t think there would be any reason that we wouldn’t implement it,” said Jason Robins, CEO of DraftKings, on Friday. “But obviously, we’re paying close attention to customer feedback, and if we hear anything that makes us change our mind, we’ll certainly let you know.”
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