Days after DraftKings announced plans to implement a controversial surcharge tax to New York sports bettors, Rush Street Interactive (RSI) took a strong stance against the strategy in a statement on Monday morning.
In response to high tax rates levied against NY sportsbooks – at the highest rate in the country at 51% – DraftKings felt the need to impose a tax to help supplement those costs.
Despite being the smaller operator, BetRivers Sportsbook NY is not following the same path. And Rush Street’s CEO called it “an easy decision for us.”
Rush Street seemingly takes a shot at DraftKings’ new surcharge
DraftKings took the gambling industry by storm on Friday and throughout the weekend after the surcharge announcement, which goes into affect on Jan. 1, 2025.
Rush Street, on the other hand, immediately shut down any speculation about a possible surcharge itself, as RSI CEO, Richard Schwartz, said in a statement:
“As we put our customers first, it was an easy decision for us,” Schwartz said.
“RSI remains committed to maintaining its leadership position in the industry by continuously prioritizing the needs and preferences of its players. We believe that RSI’s focus on customer satisfaction, coupled with its innovative rewards and loyalty programs, sets a benchmark for excellence in the online gaming industry.”
The statement Schwartz made is clear indication that BetRivers plans to stick by customers, and not pass down a tax for them to pay. It also appears that Caesars and BetMGM are bypassing the surcharge, too.
Why DraftKings is imposing a surcharge to customers
Starting in the new year, DraftKings Sportsbook NY will institute the tax in New York, Pennsylvania, Illinois, and Vermont. In each of those states, the sports betting tax is at or above 20%.
DraftKings CEO Jason Robins said on the Q2 2024 earnings call that the tax would be “nominal” for customers, although necessary to be able to compete with illegal markets and help with profit margins in high-tax states.
Flutter, which operates FanDuel, and PENN Entertainment’s ESPN Bet are the next dominos to drop, with earnings calls in each of the next two weeks. It’s unknown whether or not either company will follow the path DraftKings has forged.
It’s also possible that others are going to use the wait-and-see approach. Robins believes that competitors have had the same thoughts.
“I think every company has to do what’s best for their own business,” Robins said. “I think we believe this is what’s best for us. And I would imagine that if that’s our calculus, then others would come to the same conclusion.
Robins also hinted at a possible change before Jan. 1, should the company think of a better strategy. One thing that is for certain, BetRivers Sportsbook has emphatically opposed the idea of taxing its customers.
