Another gaming company with sports betting interests has addressed the gaming tax surcharge that DraftKings announced it would integrate on January 1.
And while this group has yet to even join the New York sports betting market, it will soon. Potentially by the end of the month.
During its most recent earnings call, Penn Entertainment provided a take of sorts on DraftKings implementing a tax on winning bets across four states, including in New York.
“We find it to be very interesting,” Jay Snowdown, CEO and president of Penn, said during the call. “It was unexpected from our perspective, but definitely interesting.”
ESPN Bet won’t have surcharge – at least for now
Last week, DraftKings dominated headlines after the company announced it would institute a “nominal” fee on winning bets, one that DraftKings said was designed to help the company offset the high tax rates paid in those select states.
On Thursday, Snowden shared Penn’s view on the strategy, emphasizing that “you should expect us to be observers.”
“We have a lot going on in front of us right now over the coming quarters,” Snowden said. “So I would say, when you’re talking about a potential tax surcharge in early ‘25, like that’s it’s not even on our radar. It doesn’t mean that I hesitate to ever say never.
“It just means that we’re really focused on continuing to improve the product, continuing to drive top-of-funnel and loyalty and retention. And so, we would not be a first mover on something like that. We’re going to stay very close to it. We’ll observe, we’ll see what the reaction is assuming that it does launch in early ‘25, and then we’ll probably have more to share with all of you on our quarterly earnings calls throughout 2025.”
Snowden’s comments come on the heels of Rush Street Interactive CEO Richard Schwartz, whose company operates BetRivers Sportsbook, saying that “[a]s we put our customers first, it was an easy decision for us” not to follow in DraftKings’ footsteps.
Expect NY launch of ESPN Bet by end of August
Not to be overlooked, Penn also provided a more detailed timetable for the pending launch of ESPN Bet NY.
Aaron LaBerge, Penn’s chief technology officer, said we could expect the sportsbook to go live “in late August, pending regulatory approval.”
Penn, of course, gained an avenue to New York after purchasing the license of Wynn for $25 million. Early last week, WynnBet stopped taking bets, officially signaling the transition to ESPN Bet.
As for what NY bettors might expect from ESPN Bet, Felicia Hendrix, Penn’s executive vice president and chief financial officer, noted that Penn can “leverage the reach of the ESPN brands in New York without a heavy promotional lift.”
Snowden said that “we’re going to continue to take a different approach, in terms of launching in New York versus what we did when we launched across 17 states in the fourth quarter of last year, and really lean a lot more on the product improvements, the integrations, of course, the connection that ESPN has with millions and millions of New York based sports fans.”
The Penn CEO then reiterated that “we’re live in New York before college football week one.”
