DraftKings Drops Planned Tax Surcharge Following Customer Backlash

The online gambling world was sent into a frenzy after DraftKings Sportsbook announced a planned tax surcharge to its customers. Even though the tax wasn’t projected to be astronomical, bettors across the country were less than thrilled about the idea of having to give some of their winnings back.

Fast forward one week and the online betting juggernaut has decided to drop its surcharge plans following a storm of backlash.

DraftKings Drops Planned Winnings Tax

On Wednesday, DraftKings took to X (formerly Twitter) to announce that they chose not to advance with their controversial gaming tax plans.

“We always listen to our customers and after hearing their feedback we have decided not to move forward with the gaming tax surcharge,” the statement read. “We are always committed to delivering the best value in the industry to our loyal customers.”

Given the angry comments from users across social media, it’s far from shocking to see DraftKings walk back on its plans.

DraftKings’ initial plans stemmed from various states implementing game taxes of over 20%. For example, Illinois has recently approved putting a 40% tax rate on gambling companies while places like New York implemented a 51% rate. In other words, the sportsbook was looking to recoup some of that money through its customers.

It’s scummy yet unsurprising.

DraftKings’ mistake only looked more foolish as time went on. None of the other major sportsbooks followed in their footsteps, which only painted them in a worse light. After all, does anyone want to gamble with a book that’ll withhold a portion of your winnings?

Didn’t think so.

On Tuesday, FanDuel Sportsbook — DraftKings’ biggest regulated rival — announced that it wouldn’t be pursuing any sort of surcharge. CEO Peter Jackson even described the practice as “wrong,” indicating that the last thing he wants to do is leave his customers with a poor experience. Jackson’s comments likely played a big role in DraftKings walking by their decision as the last thing they want to do is look worse than FanDuel.

Hopefully, online sportsbooks realize that being greedy by taking money from their customers isn’t the way to go about things. It isn’t as if they need the money, anyway. ESPN reported earlier this year that American sports betting generated over $11 billion in revenue in 2023 alone.

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