FanDuel Imposes 25% Bet Tax, DraftKings May Follow

Watch FanDuel Imposes 25% Bet Tax, DraftKings May Follow - SportsGrid on Dailymotion

Transcript

00:00uh fan duel added a tax to all sports bettors saying that if you bet on our site we're going

00:04to charge you a quarter to make up for the money that the state of illinois is taking from us

00:09no surprise draft king said that they could be interested in doing the same

00:12and sam it looks like they will follow suit

00:14yeah it's probably the least shocking uh story we've talked about in a long time you know one

00:21company gets charged more money by the state and say hey we're going to pass the cost down

00:27by the way like they've been saying they will for years if states do this and then the other

00:32company draft kings comes out and says yeah it's a great idea we'll do the same thing and it's being

00:36perceived a lot differently than it was a year ago when draft kings uh announced that they were going

00:42to add this surcharge that they called at the time which would have been about a 1.25 percent uh take

00:48out of all bets uh in five high tax states they got rid of that amid a lot of backlash but then just a

00:54year later illinois raises their tax rate effectively 15 to 50 for the largest companies

01:01like draft kings and fanduel that's because you have a graduated tax they have to pay so it's 15

01:06to 40 only draft kings and fanduel take enough bets and make enough money in the state to trigger that

01:1240 end and then on top of that it's the 50 cents per bet fee that gets taxed on on top of that so what

01:22they're effectively paying now is 50 and it used to be 15 not just a year ago so now we're seeing

01:28the cost pass down to bettors draft kings comes out uh saying we're going to the same thing fanduel

01:33does and pretty interesting that fanduel was the first one to act here usually it's kind of draft

01:38kings making big noise in the space i guess this time around they figured they'd let their competitor

01:42kind of take the heat and we're going to see the biggest impact of this pass down to casual

01:49everyday bettors those people who are betting ten dollars to win nine you know ten dollar parlays

01:55you know if you place a ten dollar bet on something that's like minus 120 odds for instance those odds

02:01are effectively now minus 128 because you're having that 50 cent chunk taken out now if you bet five

02:06hundred dollars a thousand you're really not going to notice this as much so it is good in a pr sense

02:13to kind of turn this back on the lawmakers and both companies have come out and said if they get rid of

02:19this tax we'll get rid of the the fee as well but if you're a big bet or if you bet a lot of money you're

02:23not really going to notice it and it's going to allow the companies to offset that tax in the meantime so

02:29we'll see if this trickles down to other states and we'll see if other companies follow suit

02:32you