DraftKings Bettors to Pay Burden Surcharge in High-Tax States

DraftKings, among the most popular sports betting services in the world, has announced that it will be adding a "tax surcharge" to all winning bets in certain states that meet the high-tax threshold. This is a significant development for sports bettors in these specific states that are affected.

Starting in 2025, the company plans to impose this surcharge in New York, Illinois, Pennsylvania, and Vermont, which could impact the net payouts for winning bets.

In an illustrative example provided by DraftKings from their quarterly report, a 3.2% surcharge was shown for Illinois, though it's not clear if this rate will be the same in the other targeted states. This move is likely a response to the increasing tax burdens that gaming companies face in these states, and it could set a precedent for how other betting platforms manage their financial obligations if similar circumstances were to occur.

In the example given, this shifts the odds from +100 to -104 for the $20 bet placed. This will be devastating for DraftKings users who are trying to ensure they get the most value out of their bets.

For bettors like you, this means that their winnings will be subject to an additional deduction before they see their final payout. The specifics of how this surcharge will be applied, and whether the rates will vary by state or bet type, remain to be seen. It will be important for users in these states to stay informed about these changes as the implementation date approaches.

A tool to combat this is in development at Sharp. This will ensure that users are not only finding the best odds with this surcharge, but also identify where lines may be best at every sports book available.

To join the conversation about this imposed surcharge, be sure to join our Sharp App Discord Community to discover what this could mean for you, and how Sharp can help you find the highest-value bets possible across every sports book in the world.