DraftKings Reverses Surcharge Plan Amid Betting Industry News

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00:00Welcome back to Newswire here on SportsGrid. Breaking news from the sports betting industry

00:07yesterday as DraftKings walks back a statement that was made a couple of weeks ago about adding

00:15a surcharge to winnings from sports bettors on their app. Let's bring in Jim Gazzale for the

00:21latest on that and also the update on Missouri's chances for having sports betting legalized this

00:26year. Jim let's dive right into DraftKings. I mean I guess it's better to write a wrong

00:32but it was really hard to fathom how DraftKings could survive even taking you know a point one

00:37percent one percent out of sports bettors money when they win because bettors have a choice to

00:43go other places and in reading the tea leaves did they just know that FanDuel was going to come out

00:47and say hey we ain't doing this we already saw some other companies doing it too. I mean the

00:52whole thing is just very bizarre to to make to by the way to have somebody say that publicly as

00:57opposed to a rumor we could do rumors all day but to make that declaration you know not the best

01:03look I would say just to be honest today. Yeah and it was you know came after FanDuel released

01:11their quarterly earnings earlier in the afternoon yesterday and then DraftKings came out about two

01:17hours later and walked back that that surcharge which you know got a lot of time and attention

01:25over the last you know 10 to 12 days since DraftKings announced that during its quarterly

01:33earnings call about a week and a half or so ago and you know I think when you you look at it

01:39the the strategy for them at least on the surface when they announced it was in an in an attempt to

01:47combat the high tax rates that they have to pay in a handful of states and you know perhaps

01:55deservedly so they received a lot of flack for it on social media and you know interestingly

02:00enough Craig I come from a tax communications world prior to my role here at Legal Sports

02:07Report so the the fascination for me not only in in the surcharge itself but also in the the

02:14communication strategy around charging your customers a little bit more I thought was was

02:20rather interesting and like you said they did walk that back yesterday and you know FanDuel prior to

02:29to DraftKings walking back this this surcharge like I said they released their quarterly earnings

02:34they said that they were not going to be placing a surcharge on their customers a couple other

02:40sports books came out during their quarterly earnings call in the last week week and a half

02:45also saying that they weren't going to be attaching a surcharge to winning bets on their

02:51customers so it seemed like DraftKings was left on a little bit of an island and you know they said

02:58in their statement listening to feedback from from their customers that's you know probably in part a

03:05large part uh very true as as I said there was a lot of discourse on on social media about it

03:12but also too you have to think that them being the only sports book major sports book applying this

03:20uh this surcharge or at least talking about applying this surcharge because they said it

03:24wasn't going to start until January uh you have to think them being on on this island all by

03:30themselves uh coupled with the uh general discontent from customers around the potential

03:38for this to to be enacted in in a couple of high-tax states uh certainly led to that decision

03:45yesterday for them to forego this surcharge on winning bettors for DraftKings yeah and and again

03:52you know hearing feedback that's the nice way to put it Jim there was no one happy with having

03:56money taken out of their wallet after winning come on guys get real all right so we are

04:02approaching the final quarter of the year in the fall Jim and we've gone through this entire year

04:07of sports betting and it has been crickets for legalizing sports betting at a lot of the you

04:13know states that still do not have it legal especially in Texas we just haven't heard all

04:17that much Missouri started to make some noise and you know we were a little skeptical as to whether

04:22or not this would actually get done but here we go sports betting in November on the ballot

04:28in Missouri Jim is there a chance that this goes through if so this will be our big sports betting

04:34state of the year yeah and you know to your point Craig this really isn't a time in the year where

04:41we're talking about states legalizing sports betting but we have two potentially here with

04:47Missouri and Nebraska which we'll get to in a couple of minutes so yesterday the Secretary of

04:55State's office in in Missouri announced that the the path to legalizing Missouri sports betting

05:03will be on the ballot upcoming in in November the voters there will get the chance to to legalize

05:10sports betting after a couple of failed attempts in the legislature the last couple of years the

05:15Secretary of State's office said that there was a sufficient number of signatures on a petition

05:22they the the group backing this effort gave in about 340,000 signatures and they needed 170,000

05:34to be verified so you know obviously they're they're taking a a large sample and you know

05:40running some percentages and that all came to fruition so Missouri bettors will get the

05:47opportunity to legalize sports betting on the ballot in in November now this process has been

05:57been going on since the fall DraftKings, FanDuel both involved in this process they've they've

06:03spent about six and a half million dollars on this effort to get that legalizing sports betting

06:10question on the ballot in Missouri so how this would work be a 10% tax rate on sports betting

06:20revenue and the the casinos and the professional sports teams in the state would have the ability

06:28to have in-person and online wagering there's 13 casinos six sports teams and the state gaming

06:34commission would also be allowed to issue two untethered sports betting licenses there and

06:41this state Missouri has always been a hot topic over the last couple of years the the push to

06:47legalize sports betting there passed the house in both 2022 and 2023 but ultimately met its demise

06:55in the senate with senator Denny Hoskins who was trying to tie it to a a VLT a video lottery

07:04terminal bill that that just didn't gain much support so and it didn't really even come up all

07:11that much this last cycle in 2024 so a couple of failed attempts through the legislature but now we

07:19sports betting will land on the ballot in Missouri coming up in November yeah and uh yeah I mean maybe

07:27this Denny Hoskins needs to take a day off the day that they decide to do uh this this uh this

07:33balloting all right uh let's real quick we have two minutes left Jim let's get to Nebraska not

07:38quite the same story here but similar they're trying to get online sports betting going

07:43yeah you're exactly right they already have in-person sports betting at a handful of casinos

07:47but there's a special session going on in Nebraska right now uh they're they're looking for

07:53ways to reduce the property tax burden in the state and some lawmakers are pushing uh online

07:59sports betting as a way to do that uh some some brief mention of uh legalizing online sports

08:07betting yesterday in the legislature a constitutional amendment did pass out of committee

08:14uh earlier this week on Monday there is a companion bill that is still sitting

08:19in committee um and you know really the the special session that's going on right now

08:24uh it seems like based on the conversations could could end at any moment and could go on

08:30uh you know in in in perpetuity it seems uh just based on the the conversations but uh lawmakers

08:38they're looking for ways to reduce the property tax burden on its residents on its citizens

08:43some have pushed this online sports betting bill conversations happening today it's been mentioned

08:50uh no definitive answer uh but you know we're we're covering it uh at legal sports report so

08:56when there's news to share in Nebraska during this special session you'll be sure that we have it for

09:00you Craig all right thanks so much Jim for coming on the show we'll keep an update on that and we'll

09:05talk again soon thanks for coming on thanks Craig

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