DraftKings New Fee Strategy: Implications for Bettors

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00:00On Friday, CEO Jason Robbins even kind of equated it to the fees you see at hotels,

00:09you know, the luxury or the whatever tax they call it to cover the basis of how much taxes

00:16they have to pay.

00:17I think there's a difference here a little bit because it is a vice industry kind of

00:21and you know, they would only charge it on winning bets, which is kind of interesting.

00:28So you place a $10 bet and you win $20, but you're paying, I think the example they were

00:35using was 32 cents.

00:37And so that's not nothing.

00:38I mean, it doesn't seem big by the scheme of things, but you know, it effectively shifts

00:45the odds from, I think it was plus 100, I don't, again, not great at math, but plus

00:49100 to minus 104.

00:52Will a bunch of bettors care?

00:54I mean, right now it seems like it's a big deal in the sports betting, Twitter ecosystem

00:58and all that.

00:59But if you're just an everyday better, who's just playing a few bets here and there on

01:02the games you're watching, is that really going to deter you from going to DraftKings

01:07if you're already an avid DraftKings bettor in New York or Illinois or Pennsylvania?

01:12That'll be interesting to see.

01:13It seems like it'll roll out in January.

01:17The biggest thing to watch, I think will be, and Jason Robbins even kind of alluded that,

01:21hey, this makes sense to us, so I think it'll probably make sense to the other companies.

01:26Will other big sports books follow suit?

01:29Today, Bett Rivers came out and said they will not, that they like that their customers

01:34come first and they will not be charging any sort of extra fee to cover taxes.

01:41Flutter will see, which owns FanDuel, will be next week, we'll see what they do.

01:46Of course, that's the biggest competitor.

01:49It's really an interesting situation and it'll be fun to watch kind of how this shakes

01:54out.

01:55Will DraftKings say, whoa, this doesn't make sense?

01:57Again, Robbins said last week on Friday that it'll take a lot to make them drop this fee.

02:03So yeah, again, it'll be interesting to see if they are the only ones that do this or

02:09if other companies see it and say, oh, they're doing it, we might as well do it.

02:13And then, of course, how the bettors react.

02:15If there's not a huge pushback, ultimately, you have to wonder, because again, going back

02:21to that hotel example, even though they're completely different industries, how often

02:25do you look at a hotel bill and complain about those extra couple of dollars on the receipt

02:30that they charged you that were not in the initial room fee?

02:34So I don't ever do that, but that's me.

02:38Maybe I should.

02:39But yeah, a lot of things to kind of keep in mind moving forward.

02:43Robbins kind of also thinks that this might cause some public cries to the lawmakers to

02:51shift taxes back, but I'm not sure that's a shoo-in either, because the lawmakers already

02:57set these taxes and said, this is your industry, this is what we're taxing you, figure it out.